In a year that has been witnessing significant public market activity among startups, half of the new-age tech companies that are gearing up for market debut remain entrenched in losses. Of 42 companies FE tracked which have either filed their draft red herring prospectuses with Sebi or are preparing to do so, 21 reported net losses in their last-available financials.
Among the loss-making startups are edtech unicorn PhysicsWallah, e-commerce platforms Meesho and Flipkart, logistics firms Shiprocket and Shadowfax, fintechs PayU, PhonePe, and Innoviti, quick commerce unicorn Zepto, meat-delivery startup Licious, mattress maker Wakefit, and F&B house of brands Curefoods and Rebel Foods.
Combined loss of 21 startups cross Rs 12,000 crore
A back-of-the-envelope calculation shows that the combined loss of these 21 startups stood at over Rs 12,000 crore, largely led by Flipkart, PhonePe, Zepto and Zetwerk.
While it isn’t mandatory for companies to report a net profit for listing, National Stock Exchange (NSE) norms stipulate that they should have operating profit or earnings before interest, depreciation and tax for at least any two of the three financial years preceding the application.
However, many investors look beyond the bottom line to evaluate the IPO readiness of a startup. “Unlike traditional manufacturing firms that capitalise large costs like land and machinery on their balance sheets, startups channel most of their spending into growth and customer acquisition, which directly hits the P&L (profit and loss),” explains Punit Shah, managing partner at Alteria Capital, a venture debt fund. “This often makes them appear loss-making despite being profitable at a unit economics level. Hence, operating metrics are more meaningful to look at than net profit,” he added.
Besides strong unit economics, scalability, positive cash flows, working capital management, as well as a clear market position, proprietary technology, and brand strength also make startups more attractive to investors, noted Shivani Nyati, head of wealth at Swastika Investmart. She expects the current wave of startup IPOs to attract strong retail participation despite profitability concerns.
“Retail investors are increasingly drawn to high-growth opportunities and are willing to invest in companies with promising business models and long-term potential, even if they are not yet profitable,” she added.
Oyo records Rs 200 crore in QI profit
While these 21 IPO-bound startups are still struggling to break even, an equal number of them are profitable. For instance, Oyo’s net profit more than doubled to Rs 200 crore in the first quarter of FY26, from Rs 87 crore in the same period last year. Its revenue also surged 47% year-on-year to Rs 2,019 crore, while gross booking value jumped 144%.
Besides Oyo, digital lender Kissht reported a profit of Rs 160 crore in FY25 and Lenskart posted a net profit of Rs 297 crore. Both Kissht and Lenskart have filed their draft IPO papers in August. Among the fintech firms, Pine Labs reported profit of `26.1 crore in the first nine months of FY25, Moneyview reported a profit of Rs 171 crore in FY24, while Razorpay posted a profit of `35 crore during the same fiscal year.
While Razorpay hasn’t filed its DRHP yet, it has secured board approval to convert into a public limited company and has also shifted its domicile to India by merging its Delaware-registered parent entity with its local subsidiary. Moneyview has also converted into a public company and renamed its parent entity, but has yet to file its draft IPO papers. Meanwhile, Pine Labs has filed preliminary papers, looking to raise`2,600 crore through the issuance of fresh equity shares.