Over the last few years, India’s digital economy darlings — Paytm, Nykaa, Zomato, Ola Electric, Swiggy and a few others — have tested investor appetite with their public offers. These companies, once the flag bearers of India’s startup boom, entered the public markets riding narratives of scale, disruption, and limitless growth. But when execution didn’t match those lofty expectations, the market’s response was swift and brutal. Equally, the rewards have been there for those who matched the hype.
When Nykaa made its blockbuster debut with a valuation of Rs 1 lakh crore and a mind-boggling 1,200x price-to-earnings multiple, investors believed they were buying into a high-margin beauty-tech empire. When growth slowed and profits lagged, the stock was swiftly punished. Adjusting for corporate actions, the shares are down about 25% from the listing price.
Paytm, which launched India’s one of the biggest IPOs at Rs 18,300 crore, faced a similar reckoning. Its lack of clear profitability, coupled with regulatory scrutiny, burned holes into early euphoria. The company’s market cap fell by nearly two-thirds within a year. Analysts say these episodes mark a permanent shift in investor mindset. valuations without earnings no longer sustainable.
“The market has turned fundamentally unforgiving,” says Abhinav Tiwari, Research Analyst at Bonanza. “Narratives and valuations no longer outweigh execution and profitability. Investors now reward operational discipline and sustainable unit economics, not growth at any cost.”
Zomato, on the other hand, offers a perfect example of gaining the trust of the market after scripting a dramatic comeback. Its pivot from reckless expansion to disciplined execution paid off, with the company reporting a Rs 527 crore profit by FY25. The contrasting trajectories of Zomato and Swiggy show that the Street now differentiates sharply between ambition and achievement. Swiggy is roughly trading around the same levels as its debut, even after a year, mostly due to losses and competition pressures.
Groww and Lenskart: The next test cases
This new reality forms the backdrop for the Groww and Lenskart IPOs — two of India’s most anticipated listings of 2025. Both enjoy massive user bases, tech-driven business models, and brand familiarity. But analysts are unanimous that the Street’s expectations are no longer driven by size or hype, but rather focused on sustainability.
Groww, which has rapidly grown into one of India’s top brokerages, appears structurally stronger. The fintech platform has achieved profitability, with EBITDA margins of 59% and contribution margins at 85%. But its dependence on trading volumes — especially in the derivatives segment — exposes it to regulatory risks.
Groww should avoid the trap of over-expansion into too many products without clear monetisation — the same misstep that hurt Paytm. “It must deepen engagement in core offerings first and maintain transparency on profitability milestones, just as Zomato did,” said Vinit Bolinjkar, Head of Research at Ventura Securities
Yet, even for a profitable fintech, valuation remains a concern. At a post-IPO price-to-earnings multiple of around 40x, Groww trades richer than traditional players like Angel One or Anand Rathi. That premium, analysts caution, could put pressure on post-listing performance unless the company sustains growth beyond its core brokerage business.
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For Lenskart, the challenges are different. While the eyewear leader has built scale and visibility, its adjusted net margin of just 1.9%, padded by one-time gains, suggests fragile profitability. High lease liabilities, rising costs, and inventory buildup are weighing on cash flows. The business, analysts said, must prove that optical retail can deliver consistent, recurring margins — something the Street will closely watch.
“The market sentiment has matured,” says Tiwari. “IPO hype without earnings durability is punished. For Lenskart, it’s proving that optical retail can deliver real, recurring margins.”
Bolinjkar says that the next generation of digital listings can learn from their predecessors’ missteps. “Lenskart must focus on improving unit economics by optimising supply chains and cutting high customer acquisition costs, as Nykaa did during its profitability turnaround,” he said.
Both companies, analysts agree, must focus on technology-driven customer retention rather than raw user growth. Nykaa’s success in personalising its customer experience and Zomato’s disciplined product pruning offer blueprints for others. Meanwhile, Lenskart’s brick-and-mortar-heavy model must avoid the operational pitfalls that plagued Ola and Swiggy, where overextension crushed margins.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)