The tepid market response towards the debut listing of eyewear retailer Lenskart has intensified concerns over the fading appeal of Indian startup IPOs (Initial Public Offerings) among retail investors, signaling a deeper trust deficit in the country’s once-hyped technology listings.

On November 10, 2025, Lenskart shares opened nearly 3 percent below their issue price on Monday. It plunged a further 11.5 percent in early trade, erasing optimism that surrounded one of India’s most anticipated public offerings. The INR 7,278 crore ($870 million) IPO was oversubscribed 28 times, attracting bids worth over INR 1 lakh crore.

But the mood soured even before trading began. The stock’s grey market premium, a key indicator of investor enthusiasm, tumbled 95 percent from late October, dropping from INR 120 to just INR 6–8 per share by listing day. Market analysts say the weak debut reflects a broader loss of faith among individual investors in Indian startup IPOs, once seen as high-growth bets riding on the country’s expanding digital economy.

Retail Investors Pull Back

Retail investors, who account for about three-quarters of all IPO participation in India, are now taking a cautious stance. According to market data, retail subscriptions fell to 26.99 times in 2025 from 33.71 times the previous year.

The shift is rooted in returns. The average first-day gain for IPOs this year stands at 8.4 percent, down from 29 percent in 2024 and 27 percent in 2023. Nearly 60 percent of new listings in October either stagnated or lost value on debut. Over the past 21 months, IPOs have yielded just 4 percent on average, with more than half trading below their issue price.

“The Lenskart listing is a reminder that subscription numbers and hype don’t guarantee post-listing performance,” said market analyst Ambareesh Baliga. “Valuation discipline matters more than ever.”

Trust in Tech Startups Falters

The pullback is sharpest in India’s technology-heavy sectors — fintech, consumer tech, and direct-to-consumer (D2C) brands — which account for around 16 percent of all listings.

After Lenskart’s poor start, Groww’s grey market premium fell from INR 16 to 5, PhysicsWallah from INR 9 to 4, and Pine Labs from INR 35 to 4. By contrast, traditional sector IPOs, particularly in manufacturing and infrastructure, continue to attract investors.

Experts say valuations have become detached from fundamentals. Lenskart’s IPO valued the firm at roughly INR 70,000 crore, about 235 times its annual earnings, even though much of its profit came from one-off gains.

Five Major Sentiment Breakers

Against this backdrop of investors losing faith in tech IPOs, five recent startup disasters show exactly what’s going wrong with how new companies go public in India.

OYO’s Unfair Share Plan Creates “Daylight Heist” Uproar

OYO Hotels, an online hotel booking platform, faced immense investor anger in late October 2025 when it announced a complex bonus share plan right before going public. The company proposed a system in which insiders could receive up to 1,109 additional shares for every share they owned, while regular investors would receive only one additional share.

People on the internet called this plan a “daylight heist,” basically stealing money from regular shareholders. Insiders had only three days to figure out and choose the favorable option, while regular investors faced a confusing decision. The whole structure meant regular investors would own much smaller pieces of the company if the plan went through—it was designed to make insiders richer at everyone else’s expense.

Angry investors on Reddit and X (formerly Twitter) called out the unfairness immediately. This pressure forced OYO to cancel the bonus share plan on November 3, 2025, and promise a fair version instead. But the damage was already done. People no longer trusted OYO heading into its planned INR 7-8 billion IPO.

This situation showed how Indian startup IPOs increasingly use complicated financial tricks to help insiders at the expense of regular investors. This kind of unfair practice is now becoming the norm across many startups.

OLA Electric’s Customer Service Disaster

OLA Electric, an electric scooter company, seemed like India’s next big success when it went public in August 2024. But what followed has become a lesson in why promises don’t always match reality.

A government agency, the Central Consumer Protection Authority, sent OLA Electric a warning letter in October 2024 after receiving over 10,466 complaints from customers. The actual problems were far worse; customers reported roughly 80,000 complaints each month about fires in scooters, broken suspensions, and service centers that wouldn’t fix the issues.

Things got worse when OLA’s CEO Bhavish Aggarwal got into a fight on social media with comedian Kunal Kamra in October 2024. Instead of apologizing or fixing the problems, Aggarwal dismissed all the complaints as “paid” fake criticism, basically saying customers were lying. This arrogant response made investors furious. OLA Electric’s stock price crashed 43 percent from its highest point, and the company’s total value dropped 70 percent.

The government investigation found something shocking. OLA claimed it had fixed 99 percent of customer complaints, but when officials checked, almost none had actually been fixed properly. This proved the company was lying to investors.

Then came an even bigger bombshell in November 2025. South Korean police and intelligence officials claimed that someone who used to work at LG Energy Solution, a South Korean battery company, had secretly given OLA Electric valuable technology for making specialized batteries. This person allegedly passed production secrets and manufacturing knowledge to OLA in late 2023.

OLA Electric said the accusations were completely false and claimed the South Korean company was just jealous of their success. OLA said the technology that was supposedly stolen was outdated and not even used.

But battery experts didn’t believe OLA.

Dhivik Ashok, the founder of Go Green BOV, pointed out that OLA hired someone who had worked at LG for 30-35 years with battery experience, which made the technology theft seem very possible. South Korean investigators called this a serious matter involving “core national technology.”

This latest controversy made regular investors even more worried. They now wonder whether OLA Electric got its advanced battery technology through honest means or by stealing someone else’s invention.

Lenskart’s Crazy Price Tag, Founder Loan Manipulation, and Timing Tricks

Lenskart, created huge controversy with its October 2025 IPO filing. The company asked for an INR 70,000 crore valuation (about $8 billion), which meant people would pay 235 times the company’s annual earnings, a totally unrealistic ratio.

Investors immediately questioned this insane price. Insiders had recently repurchased company shares for INR 8,700 crore, about one-tenth of what Lenskart now claimed it was worth. This didn’t make sense. Also, the company’s profits in 2025 mainly came from one-time events and lucky gains, not from actual healthy business operations.

CEO Peyush Bansal made things worse by saying Lenskart cares about “customers, not shareholders,” basically telling investors they don’t matter. Even investor Shankar Sharma, who defended the price as reasonable for tech companies, admitted the company made “serious mistakes” in how it talked to investors.

But here’s the really shady part. In July 2025, news broke that Bansal had borrowed INR 200 crore to buy more company shares for himself right before the IPO. Bansal wanted to raise his personal ownership from 4 percent to 6 percent by buying shares from existing investors like SoftBank at a $1 billion valuation, which was only one-tenth of Lenskart’s claimed INR 70,000 crore IPO value.

This move looked terrible. Bansal was basically buying shares at a 10x discount just weeks before asking regular investors to pay full price in the IPO. This made people wonder: Does the CEO actually believe this company is worth INR 70,000 crore, or is he just using the IPO to get rich quickly?

Later, it became clear that billionaire Radhakishan Damani and SBI Mutual Fund invested INR 200 crore in Lenskart by buying shares right before the IPO filing, further evidence of suspicious timing and valuation games.

The “grey market premium” — what insiders predicted the stock price would jump to —crashed by 70 percent before listing, signaling deep investor doubt. Regular investors on Reddit basically gave up, saying “the market doesn’t care about whether companies actually make money anymore.”

This whole situation proved that Indian startup IPOs increasingly use tricks to inflate prices and benefit founders. Regular investors get left holding overpriced shares while insiders profit.

boAt: Founders Secretly Quit, and Staff Mass Departure

boAt, a company that sells audio speakers and smartwatches, shocked investors with what it revealed in its October 2025 IPO filing. Both company bosses, CEO Sameer Mehta and marketing chief Aman Gupta, suddenly quit their jobs just 29 days before the IPO filing.

Mehta moved to a less critical director role, while Gupta became a board member without receiving a salary. Experts called this a “planned escape.” The founders were basically distancing themselves from responsibility right before asking the public for money.

The situation got darker. Over one-third of boAt’s employees quit in the year leading up to the IPO, a 34.18 percent turnover rate, up from 28.14 percent the year before and 27.09 percent the year before that. This massive staff exodus was what one LinkedIn expert called a “mass collapse,” showing that “the company culture is destroyed.”

A total of 161 full-time employees left boAt in that one year, even though the company offered them stock options that should have made them want to stay. People on Reddit suggested employees were either “miserable even with the promise of future stock wealth” or “have zero confidence that the company’s stock will be worth anything.”

boAt also cut its IPO size from INR 2,000 crore to INR 1,500 crore, raising questions about whether enough people really wanted to invest. On Reddit’s investment community, people openly asked whether boAt was “another scam,” pointing out that the company basically buys products from China and rebrands them.

But the biggest ongoing criticism involves boAt’s “Made in India” claims. For years, people have accused boAt of “white labeling,” basically buying finished Chinese products, doing minimal assembly in India, and then calling them Indian products.

Reddit users called out the fake marketing, asking why products labeled as “Indian” have “Made in China” stamps on them. Critics argued that most of the money customers pay goes to China instead of supporting actual Indian manufacturing.

boAt initially ignored these complaints but eventually decided to address them through a funny advertising campaign in January 2025 featuring a comedian. The company claimed that 75 percent of its products are made in India at a facility run by Dixon, which employs 15,000 workers.

But people still didn’t believe boAt. Experts pointed out that boAt doesn’t design its own products; it just buys designs from Chinese manufacturers and slaps its brand name on them without owning any of the original ideas. This raises a serious question: Is boAt really an Indian success story, or is it just a fancy Chinese repackaging operation?

As boAt headed toward its IPO, investors are skeptical. Their concerns focus on the founders secretly leaving, massive employee departures, weak profit margins, and serious doubts about whether boAt is actually an Indian company or just a Chinese brand with an Indian name.

Paytm: The IPO Disaster That Destroyed Investor Money

Paytm went public back in November 2021, before the recent wave of startup IPOs. But its complete collapse shows what happens when a company makes promises it can’t keep. Paytm’s stock price fell 80 percent from its highest point, erasing INR 1.03 lakh crore in investor money—an absolutely devastating collapse.

The main problem was that Paytm repeatedly violated government banking rules set by the Reserve Bank of India. In January 2024, the RBI basically shut down most of Paytm’s banking operations, saying the company had repeatedly violated rules and raised serious concerns.

Investigators found that Paytm had significant problems with how it moved funds between its regulated banking business and the rest of the company, leading to accounting issues and conflicts of interest. They also discovered many fake accounts, inadequate checking of customer identity, and way too many inactive accounts that looked like they might be involved in money laundering schemes.

The RBI had warned Paytm, fined it, and set restrictions since 2018, but the company kept ignoring the warnings. When the RBI finally shut things down, it effectively destroyed Paytm’s entire business model by blocking the payment services on which the whole company depended.

People who invested in Paytm’s IPO lost enormous amounts of money. The situation proved that when companies chase growth at any cost and ignore government rules, it doesn’t end well—they destroy investor money and shareholder value.

This is basically the worst-case IPO scenario, enormous promises, bad management, and complete shareholder destruction.

What All Five Fiascos Have in Common

Repeated patterns across India’s major startup IPO failures explain why retail investors are turning away from tech listings.

First, founders and early backers often treat IPOs as cash-out events rather than fundraising for growth. OYO’s insider bonus plan, Lenskart’s inflated pricing, and boAt’s executive exits highlight how listings have become vehicles for enrichment, not value creation. Institutional investors typically sell soon after listing, underscoring short-term intent.

Second, retail investors now recognize that lofty valuations rarely match performance. Heavy subscription no longer signals post-listing gains; it only signals higher risk. Third, persistent regulatory violations have eroded confidence. OLA and Paytm went public despite unresolved investigations, wiping out investor wealth.

Fourth, poor governance and communication, from dismissive CEOs to misleading claims, have deepened mistrust. Finally, analysts say India’s startup IPO wave has become a valuation bubble, driven by hype over fundamentals.

“It’s stupidity masquerading as innovation,” investor Shankar Sharma said.

What Happens Next to India’s Stock Market

The weak Lenskart listing on November 10 represents a turning point. When a company raises INR 7,278 crore with massive investor interest but the stock still falls on the first day, it tells you regular investors have stopped trusting these IPOs.

Regular investor participation will likely decline further. If this trend continues, the average first-day profit could fall even lower than 8 percent. More importantly, regular investors might completely stop investing in new technology companies and take their money elsewhere, forcing IPO companies to depend solely on big institutions.

Companies like Groww, PhysicsWallah, and Pine Labs that want to go public soon are in trouble. Their pre-listing premium prices have already fallen by 70-94 percent, suggesting investors think these companies will fail.

The government needs to step in. SEBI (India’s stock market regulator) should require companies to explain their valuations more clearly, adopt better management practices, and provide more honest information about profits.

Without fundamental rule changes, regular investors will keep avoiding new technology startups, meaning only the biggest and richest companies can go public, while smaller, innovative companies can’t raise money.

The message from Lenskart is crystal clear. India’s stock market system has decided that if profit-making is more important than creating real value for the company, money won’t flow into the listings. Until that changes fundamentally, regular people will continue to be skeptical about investing in tech startup IPOs, and that’s actually the wise choice.

Stay ahead of the curve and follow IndiaTechDesk on Facebook, Twitter and Linkedin for in-depth news of market trends, funding updates, and regulatory changes affecting startups in India.