FirstCry and Ola Electric lead trend of new-age firms altering IPO spending plans

Newly listed Indian tech companies are changing how they spend their initial public offering proceeds. Rather than letting public cash sit in low-yielding bank accounts while project timelines drag on, several high-profile startups are seeking shareholder permission to divert hundreds of crores to more lucrative opportunities.

At least four new-age firms listed since mid-2025 are currently considering realigning between ₹500 crore and ₹700 crore of their primary IPO proceeds, according to industry executives. When companies go public in India, the funds typically sit in escrow or monitoring accounts with scheduled commercial banks, earning a modest 4% to 6% annually. With operational timelines stretching out, management teams are deciding that keeping that capital idle no longer makes financial sense.

Shifting priorities at FirstCry, Ola, and MobiKwik

Several major household brands have already started the formal process of changing their IPO spending targets.

Brainbees Solutions, the parent company of baby-products retailer FirstCry, announced it is seeking shareholder approval to redirect ₹280 crore of its IPO proceeds. The company wants to scale back its planned expansion in Saudi Arabia and reduce the number of new standalone Babyhug stores it opens in India in favour of other opportunities.

Bhavish Aggarwal’s Ola Electric Mobility has also changed its plans. The electric vehicle manufacturer is shifting ₹575 crore away from its research and development budget to fund organic growth and pay down debt. This is the second time Ola has adjusted its IPO spending; shareholders previously approved a reduction in R&D spending in August 2025 to increase allocations for debt repayment.

Fintech firm MobiKwik is also reshuffling its capital. The company plans to divert ₹61 crore from the organic growth budget of its financial services unit to its subsidiary, MobiKwik Distribution Services, alongside a ₹34 crore shift from its payment devices division into its broader payment services business.

Evolving market realities

Corporate finance experts say these changes reflect pragmatic management in a volatile economic climate, rather than failures in pre-listing planning. Siddhartha Desai, a principal associate at the law firm JSA, noted that geopolitical tensions, currency volatility, and shifting energy costs have altered the assumptions startups made when first drafting their prospectuses.

"Promoters and boards are realising that sticking rigidly to original IPO end-use projections often does not make financial sense given the volatile market," Desai said.

Historically, listed Indian companies rarely altered their stated IPO objectives. Today, changing those targets helps companies preserve their projected internal rates of return. Because primary issue proceeds usually make up only a small fraction of a tech startup's overall market valuation, these shifts do not significantly change the broader investment thesis for major shareholders, according to Raghuram K., a partner at Uniqus Consultech.

Foreign portfolio investors drive the primary market boom

While already-listed firms are busy shifting their capital, foreign portfolio investors (FPIs) are continuing to pour fresh money into India's primary market.

In September alone, foreign investors put $1 billion (₹9,676 crore) into new public offerings, even as they pulled a record $4.8 billion (₹45,537 crore) out of the secondary market. The massive primary market push was driven by an unusually busy month that saw 34 IPOs hit the market, as companies rushed to list before having to file fresh audited financial statements.

Buying into primary listings allows large foreign funds to secure significant stakes in growth-stage companies at a discount to established public peers, without triggering the sharp price movements often caused by large block trades in the secondary market.