The period from 2021 to 2023 saw a flurry of IPOs amongst digital-first consumer tech companies, like Nykaa, Zomato, Paytm, PolicyBazaar and MamaEarth. All digital-first, well-funded, high-profile startups that were set on entering the public markets to raise even more funds via initial public offerings.
All these companies generated plenty of buzz and captured investor interest with digital disruption, innovative business models and promises of high growth. However, moving from a fast-growing startup to a profitable publicly-listed entity isn’t without its challenges. How have they performed? Are they profitable yet? Or was it all hype? We’re taking a closer look, starting with Zomato, Nykaa and Paytm.
Zomato: Consolidation, expansion and growth with fluctuating profits
Listing date: 23 July 2021, ₹72 – ₹76 per share
Zomato (listed as Eternal now) was the poster child of the startup IPO boom and the first to go public amongst these digital-first companies. The market sentiment was positive, and since its debut, the stock has gone from the 76-rupee mark to hovering above the 200-rupee mark as of May 2025.
However, it wasn’t profitable right out of the gate. The company posted its first-ever net profit of ₹2 crore in Q1FY24, a good two years after listing and fifteen years after its inception in 2008. The journey to profitability was made possible due to some strategic pivots and acquisitions. Zomato launched as a restaurant aggregator and food delivery service platform in 2008, but has since diversified, venturing into multiple new consumer-facing verticals.
- Food delivery: The core business remains what it launched with: Food delivery, and providing an effective platform for connection between restaurants, customers and delivery personnel.
- HoReCa/Food services: Zomato also launched a business called Hyperpure in 2019, a B2B restaurant supply platform. It’s described as a “one-stop solution for all things kitchen,” supplying end-to-end kitchen solutions, fresh produce and high quality ingredients, warehousing and logistics, packaging and delivery.
- Quick commerce: With the acquisition of Grofers in 2022, Zomato stepped into the quick commerce/grocery delivery game.
- Entertainment services: In November 2024, Zomato launched a new ticketing app, District, for its “going-out vertical.” Users can book tickets for movies, live performances, and dining out. Earlier, in August 2024, Zomato acquired Paytm’s entertainment ticketing business, including Paytm Insider.
The launches and acquisitions opened up new service options for the company, and with rapid expansion, profits have seen a rise and fall over the years. Zomato’s consolidated net profit fell 78% year-on-year to ₹39 crore in Q4 FY25, compared to ₹175 crore in the same quarter of FY24. Despite the sharp decline in profit, the food delivery company’s revenue from operations grew 64% year-on-year, reaching ₹5,833 crore in Q4 FY25. But, despite fluctuating profits, Zomato has seen its market capitalisation rise, which can be attributed to positive revenue growth, aggressive expansion policies, and profits in the food delivery/aggregator vertical.
Zomato’s strategy of consolidating food delivery, hyperlocal services, quick commerce and their latest foray into entertainment services via the District app may pay off and lead to steadier gains in the years to come. Long-term success, though, will depend on Zomato’s ability to sustain growth, manage cash burn and outpace competition in these diverse verticals.
Nykaa: Growth, expansion, and profitability with a drop in market cap
Listing date: 10 November 2021, ₹1085 – ₹1125 per share
Nykaa can be considered India’s original online marketplace for beauty, with a unique DTC (direct-to-consumer) model. In many ways, it paved the way for other online beauty retailers like Tira and Tata Cliq Palette. And Nykaa (FSN E-Commerce Ventures) made quite a stellar debut: the IPO issue price was around ₹1,125, and it listed at a premium of over 82% at ₹2,054 per share on the NSE.
However, since its blockbuster listing, there have been a mixed bag of developments.
Nykaa started with beauty and skincare, but quickly saw opportunities in adjacent high-growth categories. It expanded its offerings to include personal care, wellness, luxury beauty, and fashion. This strategic diversification led to the creation of dedicated verticals like Nykaa Fashion, a curated platform for apparel and accessories.
The company also took a bold decision to step into omnichannel retail, establishing brick-and-mortar stores in premium malls and high-street locations across India. These physical outlets served as key customer touchpoints, allowing for a hands-on product experience and significantly boosting brand visibility, trust, and loyalty. This helped Nykaa tap into wider consumer segments and reinforce its presence as a “lifestyle” brand.
Alongside its physical retail expansion, Nykaa carefully built and acquired a diverse portfolio of private-label brands across categories like skincare, cosmetics, wellness, and intimate hygiene. These include Kay Beauty, Dot & Key, Earth Rhythm and Pipa-Bella, a jewellery brand.
Nykaa achieved profitability in FY21, reporting a net profit of ₹61.94 crore, a significant turnaround from a net loss of ₹16.34 crore in FY20. This positive trend continued, with the company maintaining profitability in subsequent quarters.
However the journey hasn’t been without its challenges. Within a year of listing, the company saw a sharp decline, losing billions in market capitalisation. By October 2022, its market capitalisation had come down to ₹53,540.46 crore, a significant drop from its initial valuation. During this period, the Nykaa board approved a stock split, issuing bonus shares in the ratio of 5:1, or five bonus shares for every one share held in the company. (A stock split is a corporate action where a company increases the number of its outstanding shares by dividing its existing shares. This lowers the share price without changing the company’s overall market capitalisation and makes shares more affordable to other investors.)
In Q3 FY25, Nykaa reported a significant 61% year-on-year increase in profit after tax, reaching ₹26 crore. Revenue from operations also saw a strong rise of 26.7%, growing to ₹2,267.21 crore compared to ₹1,788.80 crore in the same quarter last year. Its expansion into fashion retail and offline stores has been capital-intensive, it has eaten into the pace and efficiency Nykaa enjoyed while being digital-only. The company has given a big push to its fashion portfolio, but the growth in this segment hasn’t been as anticipated, rising just 8% year-on-year during Q3FY25.
While the company has remained cash-positive, it hasn’t yet delivered consistent profits at scale. Nykaa has certainly shown resilience with steady growth in its beauty and personal care segments, but the ability to adapt and innovate will be crucial in maintaining its position in India’s evolving e-commerce sector. Their omnichannel strategy and ability to retain premium customers may be what helps register healthier profitability in the long run.
Paytm: Significant growth, substantial challenges
Listing date: 18 November 2021, ₹2080 – ₹2150 per share
Digital wallet and fintech company Paytm’s IPO in 2021 was the largest ever in India, raising a whopping ₹18,300 crore. Since then, the company has seen its fair share of growth and challenges. Paytm’s USP was the merchant section of the payments business, since it was the leader in P2M or person-to-business transactions. It became a leading digital payments platform, particularly in offline merchant payments and mobile wallets. But as UPI overtook wallets (and as Google Pay and Phone Pe overtook Paytm), the company had to pivot and expand to keep up.
Thus came a series of growth and expansion measures, like Paytm for Business (QR-code based UPI payments for merchants), Paytm Soundbox (a smart speaker for merchants, to enhance and simplify offline payments), Paytm Money (Investment services), and Paytm Payments Bank (zero-balance bank accounts and digital banking) and an events ticketing vertical, Paytm Insider.
The payments bank, introduced in 2017, ran into regulatory issues with the Reserve Bank of India (RBI) in 2018, due to KYC lapses: Paytm Payments Bank was barred from onboarding new customers. The first ban was resolved in six months, but another ban was imposed in 2022, preventing the onboarding of any new customers. Two years later, the RBI issued a directive restricting Paytm Payments Bank Account/Wallet from accepting new deposits or allowing credit transactions after March 15, 2024.
At present, Paytm is navigating a challenging phase, thanks to the RBI’s regulatory restrictions which has resulted in a decline in market share and revenue. While the company has seen some improvements in quarterly income and reduced losses, (reporting a 25% revenue increase to ₹9978 Cr in FY124), it hasn’t fully recovered from the impact of the restrictions. Paytm has maintained that its focus will be on the payments, merchants and lending side of the business to achieve stability and sustained profitability.
Since going public, these digital-first companies have moved from a “growth at all costs” mindset to prioritising profitability. While some have achieved strong growth and profits, others are still finding their footing. Long-term success will depend on how well they can adapt to shifting consumer and market demands.
In part 2, we’ll look at the remaining two companies, PolicyBazaar and Honasa Consumer (MamaEarth).
Sources
https://trendytraders.in/zomato-share-price-2025/
https://orangeowl.marketing/unicorn-chronicles/nykaa-success-story/
https://www.investkaroindia.co.in/p/nykaadeepdive
https://startupsindia.in/paytm-the-journey-of-indias-leading-fintech-giant/