New-age stocks take off; Swiggy goes Indian

Indian startups are gaining traction in public markets, with the value of 50 listed, institutionally backed new-age companies reaching $165 billion, according to Trifecta Capital's New Economy Index (NEI) Top 50. This figure has surpassed the $100-billion milestone achieved two years ago, showcasing the rapid expansion of the public-market universe.

While the headline number indicates growth, a stark disparity exists in stock performance. Companies like Ather Energy have nearly quadrupled since their issuance, while others such as Groww have increased by nearly 80%. Conversely, others like FirstCry and Ola Electric have fallen around 55% below their IPO prices. A notable 16 of the 33 companies with at least a year of trading history have declined, while only eight have surpassed the NEI Top 50.

The performance disparity emphasizes the heavy reliance on a small group of leading companies, with the ten largest accounting for about 69% of the cohort's market value. Public markets now serve as benchmarks for valuation and growth, providing clarity to investors before companies go public.

Recent IPOs like Swiggy's transition to an Indian-owned and controlled company (IOCC) and modifications to its inventory model underscore how institutional investors are setting the valuation standards for large private companies. Swiggy shareholders approved this transition, enabling Instamart to adopt a higher-margin inventory model, and approved a proposal capping foreign shareholding at the current 49.5%.