Equity Market Analysis

344 IPOs. ₹1.5 lakh crore raised. Median return to investors: 0%. We looked at every IPO that listed in India over the last 12 months. The headline numbers tell one story: record capital formation, retail enthusiasm, a market hungry for new paper. The return data tells another. 📉 72% of IPOs listed above offer price. Only 50% remain there today. That's 75 companies that gave back their entire listing pop and then some. The distribution is striking: a handful of multibaggers on one end, a left tail of -50% to -80% returns on the other. Timing mattered. IPOs from the first half of 2025 have held up better than those from the frenzy months of September-November. None of this means IPOs are uninvestable. It means the asset class rewards selection, not participation. The "apply to everything and flip on listing" approach has never really worked with IPOs. 📊 Full analysis below. Capitalmind Mutual Fund Capitalmind Deepak Shenoy Omkar S. Nihit Kshatriya Divyansh Agnani Aaryan Sanghavi Prateek Jain, CFA #2025IPOAnalysis

𝐖𝐡𝐚𝐭 𝐘𝐨𝐮 𝐍𝐞𝐞𝐝 𝐭𝐨 𝐊𝐧𝐨𝐰 𝐀𝐛𝐨𝐮𝐭 𝐭𝐡𝐞 𝐍𝐞𝐰 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐆𝐚𝐢𝐧𝐬 𝐓𝐚𝐱 𝐑𝐮𝐥𝐞𝐬 𝐚𝐧𝐝 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐌𝐚𝐫𝐤𝐞𝐭 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐢𝐧 𝐒𝐡𝐚𝐫𝐞𝐬 𝘉𝘺 𝘵𝘩𝘦 𝘗𝘳𝘦𝘴𝘪𝘥𝘦𝘯𝘵𝘪𝘢𝘭 𝘍𝘪𝘴𝘤𝘢𝘭 𝘗𝘰𝘭𝘪𝘤𝘺 & 𝘛𝘢𝘹 𝘙𝘦𝘧𝘰𝘳𝘮𝘴 𝘊𝘰𝘮𝘮𝘪𝘵𝘵𝘦𝘦 𝐎𝐯𝐞𝐫𝐯𝐢𝐞𝐰 Recent discussions around the impact of the Capital Gains Tax (CGT) reform on the capital market have included some misinterpretations and misinformation. While detailed implementation guidelines will be provided through official regulations, it is important to clarify the critical issues at this stage. The new CGT framework represents a major improvement over the existing law. The reform makes investment in the Nigerian capital market more attractive, reduces investment risk, and ensures fair treatment of legitimate costs incurred by investors. In essence, the reform promotes equity and confidence in the market - not the reverse. 𝐑𝐞𝐟𝐨𝐫𝐦 𝐎𝐛𝐣𝐞𝐜𝐭𝐢𝐯𝐞𝐬 𝑹𝒆𝒅𝒖𝒄𝒆 𝒊𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕 𝒓𝒊𝒔𝒌 - by allowing deductions for capital losses and other investment-related costs. 𝑷𝒓𝒐𝒕𝒆𝒄𝒕 𝒔𝒎𝒂𝒍𝒍 𝒂𝒏𝒅 𝒊𝒏𝒔𝒕𝒊𝒕𝒖𝒕𝒊𝒐𝒏𝒂𝒍 𝒊𝒏𝒗𝒆𝒔𝒕𝒐𝒓𝒔 - by providing exemptions for retail investors and tax-exempt institutions such as Pension Funds (PFAs) and Real Estate Investment Trusts (REITs). 𝑯𝒂𝒓𝒎𝒐𝒏𝒊𝒔𝒆 𝒂𝒏𝒅 𝒔𝒊𝒎𝒑𝒍𝒊𝒇𝒚 𝒕𝒂𝒙 𝒂𝒅𝒎𝒊𝒏𝒊𝒔𝒕𝒓𝒂𝒕𝒊𝒐𝒏 - by aligning CGT with income tax rules to promote progressivity, consistency, and ease of compliance. 𝐊𝐞𝐲 𝐂𝐡𝐚𝐧𝐠𝐞𝐬 1. The flat 10% CGT rate has been replaced with progressive income tax rates ranging from 0% to 30%, depending on the investor’s overall income or profit level. 2. The top rate of 30%, which applies to large corporate investors, is expected to be reduced to 25% under the broader corporate tax reform. 3. Investors may now deduct certain costs that were previously disallowed under the old CGT regime ensuring that they are not taxed on a net loss position. 𝐄𝐱𝐞𝐦𝐩𝐭𝐢𝐨𝐧𝐬 The following transactions qualify for exemption under the new CGT framework: 1. Disposals within 12 months where total sales proceeds do not exceed ₦150 million and total gains do not exceed ₦10 million. 2. Reinvestment of proceeds into shares of Nigerian companies within 12 months qualifies for full exemption where the exemption threshold is exceeded. 3. Capital gains from foreign share disposals that are repatriated into Nigeria through CBN-authorised channels. 4. Institutional investors that enjoy corporate income tax exemption such as PFAs, REITs and NGOs are also exempted from CGT. 5. Small companies with turnover not exceeding ₦100 million and total fixed assets not more than ₦250 million pay 0% CGT. 6. Gains from investment in a labeled startup by venture capitalist, private equity fund, accelerators or incubators. Read the clarification note for more.

Illusion of Growth ............Unmasking the IPO Frenzy India’s IPO markets have seen an explosive rise post-pandemic, driven by tech startups, fintech firms, and aggressive private equity exits. But recent developments have raised serious red flags. On July 25, 2025, the SEBI (Securities and Exchange Board of India) launched investigations into multiple newly listed companies for suspected manipulation of valuations, related-party transactions, and undisclosed promoter holdings. These revelations, combined with dramatic post-listing stock crashes, indicate a deeper rot. ⚠️ 𝑾𝒉𝒂𝒕’𝒔 𝑹𝒆𝒂𝒍𝒍𝒚 𝑯𝒂𝒑𝒑𝒆𝒏𝒊𝒏𝒈? 👉 Pump and Dump via IPOs: Promoters allegedly overstate revenues, attract retail investor hype, list at inflated valuations, and exit post-listing. 👉 Weak Due Diligence: Merchant bankers and lead managers rushed filings, skipping red flags in financials. 👉 Fabricated Metrics: Many IPO-bound startups reported "audited" metrics that conflict with subsequent quarterly disclosures. 👉 Fake Demand Creation: Anchor investor commitments were linked to connected entities, creating a false impression of demand. 🎯 𝑰𝒎𝒑𝒍𝒊𝒄𝒂𝒕𝒊𝒐𝒏𝒔 𝒇𝒐𝒓 𝑰𝒏𝒅𝒆𝒑𝒆𝒏𝒅𝒆𝒏𝒕 𝑩𝒐𝒂𝒓𝒅𝒔 ✅ Enhanced Disclosure Oversight: Independent directors must verify key disclosures, especially revenue projections and major contracts. ✅ Vetting of Related Party Transactions: Strong internal checks on supplier/customer overlap with promoter entities. ✅ Board Composition: Many IPO companies had weak or underqualified boards, sometimes stacked with friendly nominees. ✅ Audit Committee Vigilance: Independent directors in audit committees failed to demand deeper financial scrutiny. ✅ Liability & Accountability: Under SEBI's updated listing norms, independent directors can be held personally liable for lapses. 𝑺𝒖𝒎𝒎𝒂𝒓𝒚 𝒐𝒇 𝑲𝒆𝒚 𝑺𝒐𝒖𝒓𝒄𝒆𝒔 SEBI Circular on IPO Manipulation (July 2025) BloombergQuint Special Investigation The Ken Deep Dive MoneyControl Market Watch Livemint Report #Corporategovernance #Indepedentdirectors #IPO #Stockmarket #Valutions #Depreciations

₹26 Crore Capital Gain. Zero Tax. Legally. A recent ITAT Kolkata ruling has reinforced an important principle under Section 54F. A taxpayer sold listed shares and earned ~₹26 crore in long-term capital gains. She invested in the construction of a residential house and claimed exemption under Section 54F. The department denied it on three grounds: • She allegedly owned more than one residential house • Construction had begun before the date of sale • Sale proceeds were not directly used for construction The Tribunal rejected all three objections. Key takeaways: 1️⃣ Joint ownership of a house does not amount to exclusive ownership for disqualification under Section 54F. 2️⃣ Vacant land with a tenant-constructed factory is not a “residential house.” 3️⃣ Construction need not begin after the date of transfer. The law only requires completion within 3 years. 4️⃣ There is no requirement that the exact sale proceeds must be directly utilised for construction. Result: ₹26 crore exemption allowed. Tax demand deleted. The larger lesson? Tax planning within the framework of law is not tax evasion. Interpretation matters. Documentation matters. Substance matters. When you comply with the conditions, the law protects you.

Family Offices know that preserving capital is more than protecting against a market downturn. It means structuring assets to reduce tax exposure across generations. One of the most effective tools for that is the step-up in basis. Suppose an investment in real estate began at $5 million and grew to $100 million. If that asset were sold during the owner’s lifetime, taxes would apply to the $95 million gain. But if the asset is held until death, the cost basis resets to its current market value. Heirs now start from a basis of $100 million. Any past gains are wiped away for tax purposes. Future taxes only apply to appreciation beyond that new basis. This simple reset can mean tens of millions in taxes legally avoided. Many Family Offices hold core assets for decades. That long-term hold, combined with appreciation, creates significant embedded gains. Without the step-up, those gains are exposed at liquidation. For example, if the capital gains rate is 25%, then a $95 million gain could trigger $23.75 million in taxes. A step-up eliminates that liability. The difference stays with the family, available to reinvest or redeploy into the next opportunity. Real estate aligns with this strategy. It appreciates over time, provides current income, and allows for depreciation during the hold. And because Family Offices often build long-term direct real estate portfolios, the step-up in basis reinforces their approach. According to the Family Office Real Estate Institute, 76.4% of Family Offices invest in real estate to create generational wealth. Tax strategies like the step-up are one reason why real estate continues to play such a key role in Family Office portfolios. Capital preservation isn't just about risk management. It requires structure, timing, and a clear view of tax exposure. Using the step-up in basis correctly can help secure wealth across generations. Families who plan with these tools keep more of what they’ve built. That’s smart estate strategy and good stewardship.

Lessons: performance of listed startups At the xto10x IPO academy, we track listed startups - financials, market updates, stock price, peer comparison, analyst coverage and earnings calls. The intent? Understand the patterns behind sustained performance vs. underperformance - defined as movement in the stock price vs. the Nifty 500 over the same timeframe. Of the 30+ companies we track, here are headlines from 8 (data as on 8/4/25) #1 (2021 IPO): significant challenges for the first eight quarters - profitability doubts, acquisition anxiety. But the script flipped in 2023: delivered on guidance, turned the core business profitable and demonstrated sustained improvement in operating metrics. Outperforming by 134% #2 (2024 IPO): listed at a discount to its peer. Latest results show a widening gap with the peer on core metrics - revenue, market share and MTUs, with the CM gap narrowing slightly. Underperforming by 8% #3 (2021 IPO): A SaaS company, did an outstanding acquisition, improving EBITDA margin from 15% to 20% from FY23 to 24, leading to outperformance. Now facing challenges with revenue churn and no subsequent acquisitions (discussed in earnings calls) - underperforming by 35% #4 (2024 IPO): Not just another coworking play — 43% return on capital employed, driven by high utilisation and the managed aggregator model. Analysts now compare it with hotel peers given the ROCE profile. Outperforming by 68% #5 (2021 IPO): Beat 8Q guidance with growth in core business at 23%, new business at 115% and EBITDA margin of 47%. The stock outperformed by 46%. Then came bolder guidance relying heavily on the new business. Growth in the last 2Q is significantly below expectations, the stock is now down 30% from its peak #6 (2021 IPO): Ecomm player, gained 96% on listing day. In 2 years, revenue grew by 30%, while EBITDA margins remained flat (5% to 5.7%). Underperforming by 37% #7 (2022 IPO): Logistics player that delivered meaningful earnings growth from -₹319 Cr to ₹561 Cr, but missed market expectations of Rs. 1325 cr. Underperforming by 98% #8 (2023 IPO): D2C brand that went public with a bold offline expansion plan. But near-expiry stock issues, distributor churn, & retailer resistance to its SKU mix showed challenges in offline. Trading 31% below its IPO price So what are the patterns? At the risk of oversimplication, here’s what we have observed: Outperformers compound earnings & ROCE over a longer timeframe - quality execution translates into strong input metrics which translate into superior financial performance. This is so hard to do. Underperformers don’t have compounding yet - many challenges get in the way, e.g. high expectations (and a high issue price), widening gap with peers, relying on uncertain M&A/ new businesses/ channels to deliver earnings guidance, limited operating leverage. One overall takeaway for founders trying to decide on an IPO? Please test your recipe for compounding before you go public.

After 𝐞𝐱𝐩𝐨𝐬𝐢𝐧𝐠 𝐬𝐭𝐚𝐫𝐭-𝐮𝐩 𝐈𝐏𝐎𝐬 in my previous post, I compared "𝐋𝐢𝐬𝐭𝐢𝐧𝐠 𝐠𝐚𝐢𝐧𝐬" vs "𝐏𝐨𝐬𝐭-𝐈𝐏𝐎 𝐫𝐞𝐭𝐮𝐫𝐧𝐬" - - - What happened on listing day vs where they are today.  And the gap is wild. 𝗢𝘂𝘁 𝗼𝗳 𝟯𝟬 𝘀𝘁𝗮𝗿𝘁-𝘂𝗽 𝗜𝗣𝗢𝘀: - 26 delivered listing gains  - Average debut return: +33% 𝗦𝗼𝘂𝗻𝗱𝘀 𝗹𝗶𝗸𝗲 𝗲𝗮𝘀𝘆 𝗺𝗼𝗻𝗲𝘆, 𝗿𝗶𝗴𝗵𝘁? 𝗡𝗼𝘄 𝗹𝗼𝗼𝗸 𝗮𝘁 𝘄𝗵𝗮𝘁 𝗵𝗮𝗽𝗽𝗲𝗻𝗲𝗱 𝗮𝗳𝘁𝗲𝗿.  - Average post-IPO return: -11.3%  - Excluding top 5 winners: -38.1% 𝗧𝗵𝗮𝘁’𝘀 𝗮 𝗰𝗼𝗺𝗽𝗹𝗲𝘁𝗲 𝗿𝗲𝘃𝗲𝗿𝘀𝗮𝗹. This is not "wealth creation" but "wealth transfer" in disguise. Let me highlight, some of the classic “blink-and-miss” cases: • 𝗨𝗻𝗶𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗲: +117.6% on listing and -62.5% now  • 𝗜𝗱𝗲𝗮𝗳𝗼𝗿𝗴𝗲: +93.5% and -69.5%  • 𝗡𝘆𝗸𝗮𝗮: +79.4% and -87.8% The pattern is hard to ignore. IPO day rewards “hype”. But post-IPO rewards “performance”. And when hype fades away, you can check the performance. And most of these companies weren’t ready for that shift. At listing, the market priced in:  “Disruption”, “Scale”, “Future potential” A few quarters later, it asked for:  𝗥𝗲𝘃𝗲𝗻𝘂𝗲, 𝗠𝗮𝗿𝗴𝗶𝗻𝘀, 𝗘𝘅𝗲𝗰𝘂𝘁𝗶𝗼𝗻 And most of these didn’t have enough to back the price. 𝗦𝗶𝗺𝗽𝗹𝗲 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆: - Listing gains feel like success. - But they rarely tell you what the business is worth. If you’re applying for IPOs just for the pop, that’s a trade. If you’re holding after listing, make sure it’s actually an investment. Because the data is clear:  What goes up on Day 1, doesn’t usually stay there.  - - - ♻️ 𝐑𝐄𝐏𝐎𝐒𝐓 if you liked the analysis 🔔 𝐅𝐎𝐋𝐋𝐎𝐖 me (Akashdeep Grover) for data-driven deep dives on Indian stock market #ipo #startup #stock #finance #valuation #investing #listing #hype

What if I told you that 𝐚𝐧𝐲𝐨𝐧𝐞 could be a venture investor - even in the public markets? Venture capital rests on one of the most important ideas in investing: 𝐭𝐡𝐞 𝐩𝐨𝐰𝐞𝐫 𝐥𝐚𝐰. A small handful of companies generate the vast majority of returns, while most deliver little to no upside. That’s why venture outcomes are so widely dispersed - and why aiming for “average” in VC rarely compensates for the risk or illiquidity. What’s less well understood is that this exact same phenomenon shows up in the 𝐩𝐮𝐛𝐥𝐢𝐜 𝐦𝐚𝐫𝐤𝐞𝐭𝐬 once VC-backed companies IPO. In fact, the pattern is even more glaring... I analyzed 𝟒𝟏𝟒 𝐍𝐨𝐫𝐭𝐡 𝐀𝐦𝐞𝐫𝐢𝐜𝐚𝐧 𝐕𝐂-𝐛𝐚𝐜𝐤𝐞𝐝 𝐈𝐏𝐎𝐬 𝐟𝐫𝐨𝐦 𝟐𝟎𝟏𝟎 𝐭𝐨 𝟐𝟎𝟐𝟐. I then ranked the companies by their year-3 post-IPO returns into deciles, and tracked how each year-3 decile performed at year-2, year-1, 6 months, and 1 day after IPO. The results were eye-opening: • 𝐓𝐡𝐫𝐞𝐞 𝐲𝐞𝐚𝐫𝐬 𝐩𝐨𝐬𝐭-𝐈𝐏𝐎, 𝟓𝟎% 𝐨𝐟 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐭𝐫𝐚𝐝𝐞𝐝 𝐛𝐞𝐥𝐨𝐰 𝐡𝐚𝐥𝐟 𝐭𝐡𝐞𝐢𝐫 𝐈𝐏𝐎 𝐯𝐚𝐥𝐮𝐞. Many of the private-market “power-law winners” failed to sustain their outperformance in the public markets.    • 𝐎𝐧𝐥𝐲 𝐭𝐡𝐞 𝐭𝐨𝐩 𝐝𝐞𝐜𝐢𝐥𝐞 𝐭𝐫𝐮𝐥𝐲 𝐦𝐚𝐭𝐭𝐞𝐫𝐬. Three years in, only the top three deciles delivered positive returns, with the top decile soaring +𝟒𝟎𝟎% - 𝐧𝐞𝐚𝐫𝐥𝐲 𝟒× 𝐭𝐡𝐞 𝐧𝐞𝐱𝐭-𝐡𝐢𝐠𝐡𝐞𝐬𝐭 𝐝𝐞𝐜𝐢𝐥𝐞.    • 𝐈𝐏𝐎 𝐩𝐫𝐢𝐜𝐞 ≠ 𝐥𝐢𝐪𝐮𝐢𝐝𝐢𝐭𝐲 𝐯𝐚𝐥𝐮𝐞. By the 6-month lock-up - when pre-IPO investors can actually sell - 𝐭𝐡𝐞 𝐦𝐞𝐝𝐢𝐚𝐧 𝐬𝐭𝐨𝐜𝐤 𝐢𝐬 𝐚𝐥𝐫𝐞𝐚𝐝𝐲 𝐝𝐨𝐰𝐧 𝟕%, with only the top four deciles are positive.    • 𝐂𝐲𝐜𝐥𝐞𝐬 𝐜𝐚𝐧 𝐦𝐚𝐤𝐞 𝐨𝐫 𝐛𝐫𝐞𝐚𝐤 𝐫𝐞𝐭𝐮𝐫𝐧𝐬. The 2020 - 2022 wave made up 40% of IPOs - 𝐲𝐞𝐭 𝟓𝟓% 𝐟𝐞𝐥𝐥 𝐢𝐧𝐭𝐨 𝐭𝐡𝐞 𝐛𝐨𝐭𝐭𝐨𝐦 𝐭𝐡𝐫𝐞𝐞 𝐝𝐞𝐜𝐢𝐥𝐞𝐬, while just 4% cracked the top three.    The conclusion: 𝐭𝐡𝐞 𝐩𝐨𝐰𝐞𝐫 𝐥𝐚𝐰 𝐝𝐨𝐞𝐬𝐧’𝐭 𝐬𝐭𝐨𝐩 𝐚𝐭 𝐈𝐏𝐎. 𝐏𝐮𝐛𝐥𝐢𝐜 𝐦𝐚𝐫𝐤𝐞𝐭 𝐨𝐮𝐭𝐜𝐨𝐦𝐞𝐬 𝐟𝐨𝐫 𝐕𝐂-𝐛𝐚𝐜𝐤𝐞𝐝 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐚𝐫𝐞 𝐣𝐮𝐬𝐭 𝐚𝐬 𝐬𝐤𝐞𝐰𝐞𝐝 𝐚𝐬 𝐢𝐧 𝐩𝐫𝐢𝐯𝐚𝐭𝐞 𝐯𝐞𝐧𝐭𝐮𝐫𝐞 𝐩𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨𝐬. 𝐒𝐨, 𝐰𝐡𝐚𝐭 𝐚𝐫𝐞 𝐭𝐡𝐞 𝐊𝐞𝐲 𝐓𝐚𝐤𝐞𝐚𝐰𝐚𝐲𝐬? 𝟏. 𝐏𝐨𝐰𝐞𝐫 𝐥𝐚𝐰 𝐫𝐮𝐥𝐞𝐬. The skewed distribution of returns isn’t unique to VC - it persists in public markets, where a small fraction of IPOs drives nearly all value. 𝟐. 𝐄𝐚𝐫𝐥𝐲 𝐬𝐢𝐠𝐧𝐚𝐥𝐬 𝐦𝐚𝐭𝐭𝐞𝐫. Companies that reach the top decile at year 3 are often outperforming by 6 months or 1 year, while most laggards never recover, highlighting the importance of early post-IPO momentum. 𝟑. 𝐓𝐢𝐦𝐢𝐧𝐠 𝐚𝐧𝐝 𝐜𝐲𝐜𝐥𝐞𝐬 𝐦𝐚𝐭𝐭𝐞𝐫. Most top-decile IPOs went public ahead of the 2020 - 2021 bull run, while the majority of IPOs during those years now trade in the lower deciles, showing how market cycles shape outcomes. Signals in the Noise 🤓

Rs. 27 cr capital gain. Re 0 tax. Legally. A case every CA and CA student should know. A Kolkata-based taxpayer sold shares worth Rs. 34 cr. Capital gain - Rs. 27 cr. Tax demand - Rs. 3.2 cr. Tax paid: Re. 0. How? Section 54-F of the Income Tax Act. If you sell a long-term capital asset (not a house) And reinvest the sale proceeds into a residential property, Capital gains can be fully exempt. She reinvested the entire amount into constructing a house. Exemption claimed. Litigation followed. Tax department argued - She owned multiple properties. Eexemption not allowed. Her defense. One was a joint property. One was industrial land (not residential). She won. Key learning for CAs. This is not planning. This is positioning + interpretation. Important update. Post-2023, exemption under Section 54-F is capped at Rs.10 cr. Still, potential tax saving is Rs. 1.25 cr+ Exam + Practice relevance. Remember these conditions. Asset must be long-term (not residential house). Entire sale proceeds must be reinvested. Assessee should not own more than 1 residential house on the date of transfer. Real takeaway. Most taxpayers pay tax due to lack of awareness. Good CAs don’t just compute tax. They apply the law strategically. One section can save crores. If you know how to use it.