Illusion of IPO Profits, Gameskraft Layoffs, and Ola Electric Controversy

India’s IPO market has learned a new trick - show quick profits just long enough to secure a successful exchange listing. The pattern is familiar: a pre-listing profit surge, glossy decks with “operating momentum,” and then a soft debut once the market spots the fine print. Lenskart’s IPO is the latest example. Despite 28x subscription, it listed below its ₹402 issue price. A closer look shows why: ₹167 crore of its ₹297 crore FY25 profit came from a one-time fair-value gain on the Owndays acquisition. Without that, profit falls to about ₹130 crore, and the implied P/E jumps to over 500x. The stock didn’t stumble because people stopped buying spectacles; it stumbled because the profit wasn’t built on selling them.

It’s not just Lenskart. Groww’s pre-IPO profit bump hid slowing broking growth. Pine Labs celebrated “Adjusted EBITDA” while still losing money on paper. Urban Company briefly turned profitable before listing, only to slip back after resuming spending. This is the new game: tidy up books for the DRHP window, list fast, then blame “investment cycles” for the losses that return.

Retail investors are catching on. SEBI data shows 43% of them sell IPO shares within a week; when day-one returns cross 20%, nearly two-thirds exit immediately. That’s not faith, that’s gambling. The hangover is already visible - several 2025 debuts opened 15-40% down despite strong subscriptions. Oversubscription and grey market premiums no longer guarantee a win.

The incentive system fuels the theatre. ESOPs and VC carry pay out on valuations, not sustainable profits. Pre-IPO consultants polish the books - delay expenses, sell non-core assets, or record fair-value gains - to create a one-year miracle. It’s legal but misleading. Offer-for-sale adds to the problem. In many IPOs, most proceeds go to existing investors, not the business. Lenskart’s fresh issue funds expansion, but its large OFS made the IPO feel like an exit disguised as growth.

Public sentiment reflects the fatigue. Ashneer Grover’s viral “Infinite Paisa Online” skit hit home because it mocked exactly this behaviour - inflated valuations, adjusted metrics, and one-time profits dressed up as business performance. The humour worked because it was true.

This doesn’t mean India’s IPO window should shut. It means the market is maturing. Investors now look beyond headline profits to earnings quality and cash flow.

SEBI doesn’t need to police valuations, but it can tighten disclosure. Companies should present normalized profit (excluding one-offs) beside statutory PAT in every DRHP. Auditors should sign off on any exceptional item that moves pre-tax profit by over 10%. This won’t ban fair-value gains - it’ll just stop them from masquerading as sustainable growth.

India’s IPO credibility issue isn’t about tech’s inability to make money; it’s about comfort with illusion. If we normalize profit reporting, cap one-offs, and reward boring, cash-backed execution, listings will be priced fairly - and hold. That’s when Indian IPOs will stop being events and start becoming milestones for real businesses.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Baad Mein Aana Bhai”: Gameskraft’s Layoff Count Climbs To 400

Gameskraft’s layoff wave just got heavier - over 400 employees have now been shown the door after the real money gaming ban hit the company’s core business.

Once buzzing with titles like RummyCulture and LudoCulture, the startup is now deep in restructuring mode. The move marks one of the biggest aftershocks of India’s tightening grip on the RMG industry.

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“Ye Sab Mile Hue Hai Ji”: Ola Electric Dismisses LG Energy Tech Leak Claims For 4680 Bharat Cell

Ola Electric has brushed off reports accusing it of sourcing leaked tech from an ex-LG Energy exec, calling the claims baseless.

The company says its 4680 Bharat Cell is an indigenous innovation built on advanced dry electrode tech that outpaces older pouch cell designs.

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“Dheere Dheere Haule Haule”: InCred Holdings Files Confidential IPO Papers With SEBI

InCred Holdings has quietly filed papers with SEBI for a main board IPO, eyeing a listing on both the BSE and NSE.

The public issue is pegged between INR 3,000 Cr and 4,000 Cr, marking another big move from the unicorn’s stable. After its NBFC arm hit the billion-dollar mark last year, InCred now seems ready to test the public market’s appetite.

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“Tayyari Jung Ki”: Capillary Technologies IPO To Open On Nov 14, Cuts Issue Size

Capillary Technologies is gearing up for its IPO debut on November 14, with the issue wrapping up on November 18.

The Bengaluru-based SaaS player has trimmed its fundraising target to INR 345 Cr from the earlier INR 430 Cr plan. Even with the cut, the listing could mark a pivotal moment for India’s growing SaaS-to-IPO pipeline.

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1. Students at Tetr College have raised a whopping Rs 60 lakh within six hours on Kickstarter as part of their semester-long “Kickstarter Showdown.” From titanium electric cups to modular productivity boards, their prototypes prove that classroom innovation can go global.

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2. BabyOrgano successfully raised Rs 20 crore in a pre-Series A funding round, led by RPSG Capital Ventures and joined by existing investor Sauce.vc. The company offers a range of clinically tested products for children, with its flagship Baalprashan Swarnaprashan Drop designed to boost immunity, memory, and overall development.

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3. New Delhi-based InsightAI, a company specializing in AI-led anti-money laundering (AML) investigations, has raised Rs 1.1 crore in pre-seed funding. The funding round was led by PedalStart. The capital injection is specifically intended to fuel the company's operational growth and expansion across both India and the Middle East.

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