Part 5: Case Studies of Successful and Failed IPOs – Lessons for Investors---Be Smart Before Investing in IPOs

DEEPAK BHARTI September 10, 2025

Part 5: Case Studies of Successful and Failed IPOs – Lessons for Investors

Learning from real IPOs helps investors understand what works and what leads to loss Successful IPOs show the power of strong fundamentals, fair valuation, and clear business plans Failed IPOs expose the dangers of hype, weak financials, and poor governance Here are real case studies from India and abroad with practical lessons

Successful IPOs

Zomato (2021) --

Zomato's IPO was a huge hit as it raised ₹9,375 crore and was oversubscribed 38 times The strong brand in food delivery, massive growth in the sector, and backing by prominent investors helped attract huge interest Despite a lack of profits, investors saw its long-term growth and future potential On listing day, Zomato shares gained over 50% showing market excitement The lesson: Market leadership, sector growth, and strategic funding matter even if short-term profits are low

DMart (Avenue Supermarts, 2017)--

DMart launched its IPO at ₹299 per share and was oversubscribed over 100 times DMart had a proven retail business model, sustained profits, low debt, and highly respected promoters The IPO was listed at ₹604, a 100% premium, and has delivered multi-year growth The lesson: Strong foundation, low debt, and trusted promoters attract long-term investors

TCS (Tata Consultancy Services, 2004) -

TCS was already a global IT giant before launching its IPO The company showed robust financials, global presence, and tremendous growth after listing The lesson: Established brands with global reach and solid financials are ideal for IPO investing

LIC (Life Insurance Corporation, 2022)

The LIC IPO was one of India’s biggest and saw huge investor participation due to government backing and market dominance The lesson: Market leaders with strong credibility drive investor confidence

Failed IPOs

Paytm (2021)- Despite raising ₹18,300 crore and much hype, Paytm shares dropped 27% on debut The company was criticized for overvaluation, heavy losses, and unclear business focus The lesson: Overvalued shares and poor profitability scare investors, no matter the brand name

Reliance Power (2008) -The IPO was oversubscribed 73 times and heavily advertised But after listing, the stock price fell and never recovered Reasons included overvaluation, project delays, and regulatory hurdles The lesson: Beware of over-hyped IPOs and delay-heavy sectors; always check project progress

Sterling Wilson Solar (2019) Faced a 29% price drop on debut due to corporate governance issues and high debt Promoters failed to deliver on financial promises The lesson: Check promoter credibility and debt levels as lack of transparency hurts investors

Future Retail (2016) Big Bazaar’s parent company faced financial instability, heavy competition and unclear growth strategy after its IPO Post-debut, the company struggled with profitability and eventually entered insolvency The lesson: Weak financials, rising competition, and poor strategic direction are major red flags

Key Lessons for Investors

Successful IPOs share these traits