IPO Disclosure Woes, Aakash Sends Notice, and Lenskart Invests In AjnaLens

Over the past year, the IPO dreams of Indian startups have turned into a rush and in the eagerness to list, many are glossing over red flags. Several draft red herring prospectuses (DRHPs) filed by startups contain gaps, misstatements, or are missing risk disclosures. The uncomfortable truth is that founders and their bankers often don’t seem to care.

Many of these startups are filing DRHPs riddled with gaps, red flags, or, let’s say, “optimistic disclosures.” The logic is simple, even if flawed - they think these are "minor" issues. Until SEBI raises a concern, it’s fine. Retail investors will read what the media writes anyway, not the DRHP. So the startup files, adjusts if pushed, and moves on.

Take FirstCry, for example. Its DRHP didn’t mention key subsidiaries and associate companies, some of which are facing legal proceedings. That’s disclosure 101. Wakefit, known for its D2C furniture and mattress brand, filed its draft recently, but its DRHP didn't fully explain revenue dependencies, and failed to clearly disclose critical liabilities related to long-term leases as well as pending litigations. Ola Electric’s DRHP missed clarifying core metrics about unit economics and issues about sales and registration discrepancies and potential financial reporting.

Then there’s Oyo. Its DRHP in 2021 had multiple red flags, from significant related-party transactions to unresolved legal proceedings and unexplained jumps in valuation. Its IPO plans have since been postponed multiple times, but it’s an example of a company willing to test how far it can go with “selective storytelling.”

Upcoming players like Pine Labs are also showing signs of this same pattern. Their DRHP mentions significant tax demands, internal control weaknesses, and chargeback risks. Specifically, the company faces a Rs 214.11 crore GST demand related to GST refund they received for co-branding and gift card sales that government is disputing.

This “wait till SEBI flags it” attitude shifts the burden away from founders and bankers to the regulator, and that sets a bad precedent. SEBI has been tightening its grip in response - introducing stricter disclosure norms and asking for more granular breakups on business metrics and risk factors.

So why are these things still making it to SEBI’s desk? Founders and investors seem to believe that unless SEBI raises an explicit concern, it’s okay. A kind of regulatory “don’t ask, don’t tell.” The larger sentiment seems to be: if Zomato, Nykaa, and Policybazaar went through with DRHPs that had fuzzy profit paths or massive marketing spends without long-term retention data, and still got oversubscribed, then why should they worry?

But what’s being forgotten here is that past success doesn’t guarantee future acceptance. Yes, Zomato’s IPO was a hit despite its losses, and Nykaa saw a massive listing pop despite a high customer acquisition cost. But investor mood changes. What passed in 2021 might not fly in 2025 especially when global markets are more cautious and SEBI is publicly encouraging more transparent filings.

This wave of “minimum viable DRHPs” also signals a deeper cultural issue: the IPO has become an exit strategy for VCs and early backers, rather than a long-term commitment to public accountability. That’s why you’ll see SoftBank or Prosus reducing board roles pre-IPO, or large investors quietly exiting once the listing is done. It’s about flipping equity, not building sustainable companies.

But SEBI can’t catch everything. And the real losers in this game are retail investors who enter IPOs with incomplete or misleading information. The burden of due diligence is increasingly being outsourced to the regulator and the media.

And that’s where we think founders need to pause.

Retail investors are not like VCs. They don’t have the inside view. They don’t have board seats. They rely on the DRHP to make a decision. If startups continue to treat it as a checklist rather than a responsibility, we risk eroding trust in the entire IPO ecosystem. Once burned, retail investors are hard to win back.

We believe SEBI will eventually tighten norms, especially after a few missteps. But founders and investors would do well to get ahead of that curve. File honest DRHPs. Disclose risk factors clearly. Explain your path to profit, not with glossy projections but with real trade-offs.

If your numbers are messy or your unit economics still evolving, then mention it. Investors can handle uncertainty, but they hate being misled.

Let’s not treat the IPO as a trophy, but as a turning point. For founders, it should be the beginning of real scrutiny, not the end of accountability. And for the Indian startup ecosystem, it’s time we stopped copying the bad habits of global IPO culture and built our own playbook.

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.

“Maamla Legal Hai”: Aakash Sends Second Legal Notice To EY India Over Conflict Of Interest

Aakash has fired off a second legal notice to EY India, this time for allegedly advising its arch-rival Allen while being its own financial consultant.

The edtech firm isn't stopping there, it’s now mulling civil and criminal action over what it calls a serious conflict of interest. This follows an earlier accusation in May, when Aakash called out EY for also advising BYJU’S, its parent company.

Read more here

“Hum Saath Saath Hai”: Swiggy Block Deal, As BNP Paribas Acquires Shares Worth INR 12.2 Cr

In a notable block deal, Citigroup Global Markets offloaded 3.2 lakh shares of Swiggy at ₹381 apiece, slightly below the market close of ₹386.05.

BNP Paribas stepped in as the sole buyer, acquiring the entire lot for ₹12.2 crore. The transaction signals a quiet but deliberate shift in institutional interest around the foodtech major.

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“Bharat Ka Cyberpunk”: Lenskart Invests In AjnaLens To Develop AI-Powered Smart Glasses

Lenskart is stepping into the future - it's investing in Mumbai-based AjnaLens to co-create AI-powered smart glasses.

The idea is to merge Lenskart’s flair for frames with AjnaLens’ XR tech wizardry to craft wearables that are both stylish and smart. From spectacles to smart-specs, eyewear just got an upgrade.

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“Buland Bharat Ki Buland Tasveer”: Centre To Launch INR 2,000 Cr Drone Tech Incentive Scheme

The Centre is gearing up to launch a ₹2,000 Cr incentive scheme to give India’s drone industry a serious lift.

The goal is to make at least 40% of key drone parts locally by FY28, cutting dependence on imports. Bonus points (and incentives) if manufacturers source components from within the country itself.

Read more here

1. IPO-bound InMobi has raised ₹32 Cr from its cofounders and Singapore’s Vatera Pte to meet working capital needs. The adtech unicorn now eyes a DRHP filing in H2 2025, after earlier IPO plans hit a delay.
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2. Yulu is set to raise $8.2 Mn (₹70 Cr) from its cofounders and key backers like Bajaj Auto via a rights issue. Co-founder Amit Gupta will lead the round with a ₹28.2 Cr infusion, while others chip in ₹14.1 Cr each.
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3. InCred Finance has secured ₹400 Cr in debt funding, led by ₹300 Cr from Morgan Stanley and ₹50 Cr from Nippon Life India. The move comes as the NBFC gears up for a ₹4,000–₹5,000 Cr IPO later this year.
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