From Financialexpress · The Financial Express · · 1m 20s
The second test
Public markets now test startups beyond listings, valuing sustainable growth and profits.
In brief
Public markets now test startups beyond listings, valuing sustainable growth and profits. Public markets are separating startups with credible long-term economics from those with inflated valuations. Originally reported by Financialexpress.
IPO boom enters critical phase
The startup initial public offering boom is entering a more consequential phase with steady new listings and a pipeline of companies preparing to tap investors.
Post-listing performance split
At the September 28 close, 32 startups traded above their issue price while 22 traded below it.
Divergent returns reveal distinction
Ten companies more than doubled from their IPO price, while four lost more than half their value.
Public markets test long-term value
Public investors increasingly distinguish between companies with credible long-term economics and those whose earlier valuations relied on future expectations.
Key examples of performance
Ather Energy, Eternal, and ESDS Software Solutions have risen more than threefold, while Fino Payments Bank, FirstCry, Tracxn, and Ola Electric have suffered steep declines.
What matters for sustainability
Growth must translate into improving unit economics, operating leverage, cash generation, and sustainable profits to secure long-term value.
The second test of maturity
The startup ecosystem must now prove it can create value long after the IPO excitement fades.
The headline
Public markets are separating startups with credible long-term economics from those with inflated valuations.
