MAM
Post-IPO Performance: What Happens After the Stock Starts Trading?
The initial public offering marks a significant milestone for a company as it changes from a privately held entity to a publicly traded one. This event is often characterised by a surge in investor interest, leading to price fluctuation and increased market volatility. However, the true test of a company’s value and reception lies in its performance post-IPO.
This landscape is a complex interplay of factors, including market sentiment, investor expectations, etc. The IPOs in India have witnessed a surge in recent years, with companies across various sectors tapping into the public market. However, the performance of these newly listed entities has been a mixed bag. Statistics show that Indian retail investors drive IPOs with 57% average gains, outperforming Asia Pacific and global averages.
As Vineet Arora, the manager of Singapore-based NAV Capital Emerging Star Fund, says, the younger generation mostly do not want to invest in houses or real estate. Rather, their money is now finding its way into IPO stocks.
By examining the post-IPO trajectory of Indian companies, this piece aims to contribute to the existing body of knowledge on the trend shift.
Join us as we explore further.
An overview of the IPO cycle
This term encapsulates a private company’s comprehensive steps while transitioning into a publicly traded entity. Simply put, it showcases all the steps a private company owned by specific investors takes before offering their shares to an expensive public audience through stock exchange facilitation.
Stated below is an exhaustive listing of all the phases:
Pre IPO phase
It marks the beginning of various tasks in the Indian share market. Primarily, the private company prepares for this process by evaluating its valuation. After this, it complies with regulations, including participation in road shows and investor presentations.
IPO phase
In the second stage, the company files a registration statement with the help of the regulatory authority. This paper includes detailed information about the organisation, including risks, operational details, etc. The regulatory authority reviews this paper to confirm compliance so the company can proceed to the next step.
Book building or marketing phase
Upon approval, the organisation will engage in marketing efforts. They aim to draw interest and create demand among retail investors. Meanwhile, they present investment opportunities to potential clients.
Subscription phase
This is a critical stage when the company, with assistance from its investment bankers, offers shares to the public for the first time. The organisation determines the price band for the IPO. This indicates the rate at which investors can bid for the shares. Interested individuals can apply for the initial public offering through their demat account or online banking platforms. The company will allocate shares to successful applicants based on this demand and the number of shares available.
Post IPO phase
This stage is characterised by successfully listing an organisation’s share on a stock exchange. This marks the shift from a privately held entity to a publicly traded one subject to the scrutiny of the open market. The stock price is primarily determined by demand and supply. Factors such as the organisation’s performance, industry trends and more play a crucial role in price fluctuations. This can be viewed on the IPO dashboard.
As a public company, it faces scrutiny from investors, analyst media, etc. Transparent financial reporting, adherence to corporate governance best practices, etc, are important. Additionally, the increased number of stakeholders and the ability to trade shares freely on the stock exchange significantly enhances access to cash for the company’s shares.
Moreover, in this stage, the organisation can raise additional capital more easily through equity or debt offerings than before its IPO status.
Although prone to stricter corporate governance regulations, this phase offers opportunities for the company to explore strategic acquisitions or mergers to expand its market presence. Thus enhancing shareholder value.
Challenges of Post-IPO Phase
This landscape is laced with adversities that require careful navigation:
Meeting investor expectations
Companies face intense inspection from their shareholders. Delivering consistent financial performance and communicating their vision are important to maintain their client’s confidence. Failure to meet such expectations can lead to stock price decline and erosion of investor value.
Keeping up their financial performance
The pressure to sustain or accelerate revenue and profit is immense post-IPO. Economic downturn, increased competition and operation challenges can disrupt financial performance, impacting the company’s valuation.
Managing increased regulatory compliance
Public companies are subject to a complex web of laws. This includes financial reporting, corporate governance and investigator disclosure. Adhering to these requirements is time-consuming and costly. Contrary to this, noncompliance can result in significant penalties.
Dealing with volatility
The share market IPO can fluctuate due to various factors, such as economic conditions and investor sentiment. To overcome such situations, companies must develop strategies to manage volatility and protect shareholder value.
Opportunities for Post-IPO Phase
Despite the challenges, this stage offers various occasions for growth and development:
Access to a wider investor base
Going public exposes the company to several shareholders, including institutional investors, mutual funds, and more. It provides access to a larger pool of capital for future growth initiatives.
Enhanced brand visibility
An IPO can significantly enhance a company’s reputation. Increased media coverage or public awareness can lead to new business opportunities paired with customer loyalty.
Potential for acquisitions
With access to capital and higher market valuation, public companies can pursue strategic possession to expand their share. Apart from this, they can enter new markets or acquire complementary technologies.
Final note
With complex interplay factors that shape a company’s trajectory, the post-IPO journey is a crucial stage. Factors such as market dynamics and the company’s execution capabilities are true tests that determine long-term success.
In such scenarios, Research 360 can be a valuable tool for understanding the post-IPO landscape. Through in-depth analysis and data on factors like industry trends and investor sentiment, this platform helps you gain invaluable insights for strategic planning. By leveraging such tools, stakeholders can make informed decisions for successful trading.
Brands
YES Bank hands the keys to SBI veteran Vinay Tonse as it bets on a new era
Former SBI managing director appointed as YES Bank’s new MD and CEO
MUMBAI: YES Bank is done rebuilding. Now it wants to grow. The private sector lender has appointed Vinay Muralidhar Tonse as managing director and chief executive officer-designate, with RBI approval secured and a start date of April 6, 2026 confirmed. The three-year term signals the bank’s intent to shift gears from crisis recovery to full-throttle expansion.
Tonse, 60, is no stranger to scale. Most recently managing director at State Bank of India, he oversaw a retail book of roughly $800bn in deposits and advances, one of the largest in the country. Before that, he ran SBI Mutual Fund from August 2020 to December 2022, a stint that saw assets under management surge from Rs 4.32 lakh crore to Rs 7.32 lakh crore across market cycles. Add stints in Singapore and four years leading SBI’s overseas operations in Osaka, and the incoming chief arrives with a genuinely global CV.
His academic grounding is equally solid: a commerce degree from St Joseph’s College of Commerce, Bengaluru, and a master’s in commerce from Bangalore University.
The appointment follows an extensive search and evaluation process by the bank’s Nomination and Remuneration Committee. NRC chairperson Nandita Gurjar said the committee unanimously backed Tonse, citing his leadership track record, governance credentials and ability to drive the bank’s next phase of transformation.
Non-executive chairman Rama Subramaniam Gandhi was unequivocal. “I am certain that Vinay Tonse, with his vast experience as a senior banker, will propel YES Bank to its next phase of growth,” Gandhi said, adding that the bank remains focused on strengthening its retail and corporate banking franchises and expanding its branch network.
Rajeev Kannan, non-executive director and senior executive at Sumitomo Mitsui Banking Corporation, the bank’s largest shareholder, said Tonse’s experience across retail, corporate banking, global markets and asset management positioned him well to lead the lender. SMBC said it looks forward to working with Tonse and the board as YES Bank pursues its ambition of becoming a top-tier private sector lender anchored in strong governance and sustainable growth.
Tonse succeeds Prashant Kumar, who took the helm in March 2020 when YES Bank was in freefall following a severe financial crisis, and spent six years painstakingly stabilising the institution, rebuilding governance and restoring operational scale. Gandhi was generous: “The bank remains indebted to Prashant Kumar, who is responsible for much of what a strong financial powerhouse YES Bank is today.”
Tonse, for his part, struck a purposeful note. “Together with the board and my colleagues, I remain deeply committed to creating long-term value for all our stakeholders,” he said, pledging to build on Kumar’s foundation guided by his personal motto: Make A Difference.
Beyond the balance sheet, Tonse played cricket at college and club level and represented Karnataka in archery at the national championships — sports he credits with teaching him teamwork, situational leadership, discipline and focus. In quieter moments, he reaches for retro Kannada music, classic Hindi songs, and the crooning of Engelbert Humperdinck, Mukesh and Kishore Kumar.
YES Bank has its steady-handed rebuilder in Kumar to thank for survival. Now it has a scale-obsessed growth banker at the wheel. The next chapter starts April 6.
