New-age firms seek to reallocate IPO proceeds for better returns

Another executive said that “plans like these need to be ratified at multiple levels, and will take at least six months before materializing.”

Typically, Indian companies transfer net IPO proceeds from public issue escrow accounts to issue-monitoring accounts or current accounts with scheduled commercial banks before deploying them as outlined in their offer documents. Funds held in such accounts typically earn 4-6% annually.

Growing trend

Brainbees Solutions Ltd, the parent company of omnichannel retailer for baby and maternity products FirstCry, said on 31 August that it was seeking shareholder approval to change the use of ₹280 crore of its IPO proceeds, which would entail a reduction in funds earmarked for expansion in Saudi Arabia and the opening of standalone Babyhug stores in India.

Fintech firm One Mobikwik Systems Ltd said on 2 June that it plans to divert ₹61 crore originally earmarked for the organic growth of its financial services business to its wholly owned subsidiary, MobiKwik Distribution Services Pvt. Ltd. Other than that, it also sought approval to reallocate ₹34 crore from the payment devices business to its payment services business.

Bhavish Aggarwal’s electric two-wheeler maker Ola Electric Mobility Ltd on 18 March made a fresh revision in the utilization of its ₹5,500 crore IPO proceeds, reallocating ₹575 crore from its research and development (R&D) budget towards debt repayment and growth initiatives. This marked Ola Electric’s second revision to its use of IPO proceeds, following an earlier reallocation approved by shareholders in August 2025 that reduced the R&D allocation while increasing the share earmarked for debt repayment and organic growth.

“New-age businesses operate in rapidly changing environments and must continuously adapt their strategies to emerging opportunities and challenges,” said Raghuram K., partner, accounting and reporting consulting, Uniqus Consultech Inc.

“Such strategic shifts may, in certain cases, necessitate a corresponding change in the utilization of IPO proceeds. However, this is unlikely to be a uniform trend across sectors; the impact will depend on the specific business environment and evolving priorities of individual companies,” he said.

Better economics

External economic headwinds have further widened the gap between initial fundraising targets and on-the-ground operational deployment, according to a top lawyer who deals with capital market transactions.

“This year, geopolitical conflicts, currency fluctuations and crude oil price volatility have disrupted pre-IPO projections across sectors,” said Siddhartha Desai, a principal associate at law firm JSA, where he specializes in public and private capital market transactions.

“Promoters and boards are realizing that sticking rigidly to original IPO end-use projections often does not make financial sense given the volatile market,” he added, while explaining how, historically, companies rarely changed their stated IPO object clauses, often forcing underperforming plans forward.

“In most cases, such reallocations are better understood as management responding to evolving market realities rather than necessarily reflecting shortcomings in pre-IPO financial forecasting,” said Raghuram of Uniqus. “The period from draft red herring prospectus filing to listing and subsequent project execution can be fairly extended, during which competitive dynamics, market conditions and business priorities can change significantly.”

“The primary issue itself is very small compared to the overall size of the company,” Raghuram said. “Given this proportion, a change in its use doesn't materially alter what investors are actually underwriting.”

Beyond these new-age companies, such as Zetwerk, Razorpay, Spinny and Oravel Stays, India’s growing pipeline of share sales includes other major names, such as Jio Platforms Ltd and Avaada Electro Ltd, all of which are expected to hit the market in the coming months.

India’s mainboard IPO pipeline had reached around ₹3.86 trillion as of September 2026, about 3.5 times the ₹1.10 trillion raised through 84 mainboard IPOs so far this year, according to a report by the Association of Investment Bankers of India.

Agnidev Bhattacharya

Agnidev is a business journalist with over two years of reporting experience tracking the intersection of capital, policy, and corporate strategy in India.He joined Mint in December 2025, after a stint at NDTV Profit (erstwhile BQ Prime). At Mint, Agnidev focuses on the high-stakes world of the Indian capital market, specialising in mergers and acquisitions, burgeoning IPOs, and the investment banking industry.Backed by a rigorous, data-driven approach, Agnidev frequently breaks news on the valuation cycles, deal pipelines and listing strategies of India’s most prominent companies. His reportage offers deep dives into the operational health of market leaders across the corporate landscape, providing readers with a clear-eyed view of institutional growth.He has reported on major issues like India's derivatives frenzy, IPO froth, the competitive quick commerce industry, the real-money gaming ban, and has broken investigative stories related to scandals such as IndusInd Bank's accounting manipulation and the Gensol-BluSmart fiasco.As a reporter, he brings stories that ultimately affect your stock market investments, and tries to bring clarity and brevity in a field that is often filled with jargon and noise.