Summary:
India’s startup IPO market is shifting towards profitability and cash generation as public investors reassess valuations. AceVector’s discounted listing, alongside valuation cuts at loss-making startups, highlights the growing importance of earnings visibility and sustainable business growth.
Why are startup IPO valuations being reset in India?
India’s startup IPO market is entering a more demanding phase, with public investors placing greater emphasis on profitability and cash flows rather than carrying forward valuations established during earlier private funding rounds.
The latest example is AceVector Ltd, the parent of Snapdeal, which listed nearly 12% below its IPO price on October 5 despite the issue being subscribed almost 5x. The debut highlighted the widening gap between private-market expectations and public-market pricing.
| Key development | Reported figure |
|---|---|
| AceVector IPO price | ₹32 per share |
| AceVector NSE listing price | ₹28.32 |
| Listing discount to IPO price | Around 11.5% |
| AceVector IPO subscription | 4.93x |
| AceVector valuation at IPO price | Approximately ₹1,741 crore |
| AceVector FY26 revenue | ₹510.4 crore |
| AceVector FY26 net loss | ₹45.5 crore |
| Razorpay FY25 net loss | ₹1,206 crore |
| Zepto FY26 revenue | ₹22,624 crore |
| Zepto FY26 net loss | ₹5,905 crore |
| Kuku FM FY26 profit | ₹183 crore |
| Fibe FY26 profit | ₹257 crore |
Snapdeal Parent Lists Below Issue Price
AceVector’s shares opened at ₹28.32 on the NSE and ₹28.30 on the BSE against an IPO price of ₹32, translating into a discount of around 11.5%.
The ₹420 Crore IPO was subscribed 4.93x, with the NII portion booked 8.16x, retail 4.62x and QIB segment 3.38x. The issue comprised a ₹287 Crore fresh issue and a ₹133 Crore offer for sale.
AceVector was valued at roughly ₹1,741 Crore, or $182 mn, at the IPO price. This is far below Snapdeal’s peak private valuation of around $6.5 bn in 2016.
AceVector remained loss-making in FY26, although its performance improved. Revenue from operations increased to ₹510.4 Crore from ₹395 Crore in FY25, while net loss narrowed to ₹45.5 Crore from ₹126.3 Crore.
Loss-Making Startups See Valuation Cuts
The valuation reset is not limited to Snapdeal. Of 10 new-age companies that have filed IPO papers since September 2024 and remain in the pipeline, 6 are loss-making, and 4 are profitable, according to data cited in the report.
Several loss-making companies are seeking public-market valuations below their previous private funding rounds.
| Company | Earlier Private Valuation | Reported IPO Valuation |
| Zepto | $7 bn | ~$3 bn |
| PhonePe | $12 bn | $9-10.5 bn |
| Razorpay | $7.5 bn | $5-6 bn |
| Snapdeal/AceVector | $6.5 bn peak | $182 mn |
Razorpay’s financial performance illustrates the pressure. Its net loss widened from ₹1,141 Crore in FY24 to ₹1,206 Crore in FY25, even as revenue increased about 60% to ₹3,932 Crore. Its IPO valuation expectations have reportedly moderated to $5-6 bn.
Zepto, meanwhile, doubled revenue to ₹22,624 Crore in FY26, but its net loss widened to ₹5,905 Crore from ₹4,700 Crore. The company subsequently paused its IPO process after encountering a much lower valuation than its previous private round.
Profitable Startups Are Getting More Valuation Flexibility
The picture is different for companies that have turned profitable or demonstrated a significant improvement in earnings.
Kuku FM moved from a ₹153 Crore loss to a ₹183 Crore profit in FY26, while revenue surged nearly 6x to ₹1,484 Crore. Its reported IPO valuation target of around $1.8 bn is substantially above its previous private valuation of $500 mn.
Digital lender Fibe also reported stronger numbers, with FY26 profit more than doubling to ₹257 Crore while revenue rose 31% to ₹1,585 Crore. It is reportedly seeking a valuation of more than $1 bn versus its last private valuation of around $648 mn.
Oyo’s parent Prism is another example. With profitability improving, it is reportedly exploring a valuation of $7-8 bn, higher than its latest private valuation of around $3.8 bn, though still below the peak levels seen during 2021.
Public Markets Are Drawing a Clearer Line
The recent trend does not suggest that loss-making startups cannot list. Instead, the market appears to be differentiating more sharply between companies based on revenue quality, losses, cash generation and the visibility of future profitability.
AceVector’s weak listing despite a 4.93x subscription is a useful example. Strong IPO demand alone did not translate into a listing premium once shares entered public trading.
For upcoming startup IPOs, the key question is increasingly shifting from how fast a company can grow to whether that growth can translate into sustainable earnings. Companies that demonstrate profits or narrowing losses may have greater flexibility on valuation, while those carrying large losses may have to accept a sizeable reset from earlier private-market levels.
