Decoding the KPI conundrum of new-age companies hitting the public market

Tech start-ups do not reveal important numbers to back their narratives of consumer flywheels and unrelenting growth

Loss-making new-age companies are going to the stock markets demanding stratospheric valuations — Paytm and Policybazaar were priced at more than 50 times FY21 revenue, Zomato at 20 times FY21 revenue, Nykaa sought a multiple of 23 times — but they have done little to explain their reasons for doing so.

This trend may be about to change as markets regulator, the Securities and Exchange Board of India (Sebi), announced a raft of proposals last week seeking to mandate disclosures of audited Key Performance Indicators (KPIs), details of pre-Initial Public Offering (IPO) deals with private investors and justification of IPO pricing,