IPO-bound startups race to turn profitable ahead of listing as investors turn more selective

IPO-bound startups are accelerating their push toward profitability as investor expectations become increasingly stringent.

In a recent article by moneycontrol, our Founder & MD, Mr. Shriram Subramanian, shared his perspective on why profitability has become a crucial prerequisite ahead of public listings, noting the clear shift in expectations since the 2021–22 market cycle. Today, both public and private investors seek stronger visibility on sustainable profits before backing upcoming issuers.

Mr. Shriram Subramanian said, “When you’re coming to the public market, investors will obviously ask why you are in losses and what your profitability is. Globally, companies with sustained losses have seen their stocks fall sharply.” He added, “Even in India, after a few quarters, if a company does not show a path to profitability, they will see stock prices decrease. Private investors are putting pressure too, because without a path to profitability, even merchant bankers cannot underwrite or place the shares.”

Read full article: https://www.moneycontrol.com/news/business/startup/ipo-bound-startups-race-to-turn-profitable-ahead-of-listing-as-investors-turn-more-selective-13694667.html