Zetwerk shares slide 20% on debut amid widening retail-QIB divide

The QIB portion was subscribed at 4.71 times. According to analysts, the lofty valuations and persistent losses had made the company a tough bet for retail investors. Further, an investment banker who wished to remain unnamed said that retail investors tend to focus on the grey market premium (GMP). The current GMP for Zetwerk's issue ahead of listing was zero, which indicates little interest in the issue.

Zetwerk’s lack of directly comparable listed peers also made it difficult for retail investors to assess whether its IPO valuation was justified. Without a clear benchmark to compare its financial performance, margins and valuation multiples against, investors had limited reference points to determine whether the issue was attractively priced, particularly given the company’s continuing losses. Analysts had also flagged Zetwerk’s persistent losses and high interest costs as key concerns.

Swastika Investmart noted that finance costs significantly eroded the company’s operating returns in FY26, while SMC Global Securities pointed to its dependence on third-party suppliers, industry cyclicality and competition, as well as the absence of directly comparable listed peers. These factors expose the company to risks such as continued losses, supply disruptions and order cancellations, SMC said, adding that the IPO valuation also appeared expensive.

The Rs 2,830-crore fresh issue is partly intended to repay debt. Swastika Investmart estimated that eliminating a substantial portion of high-cost working capital loans could save the company Rs 180-220 crore annually in finance costs, potentially improving pre-tax profit margins. The brokerage recommended the IPO primarily for investors seeking high-beta, long-term exposure to industrial growth. Sushil Financial Services, however, adopted a neutral stance, citing persistent losses and thin margins, and said the issue may be suitable only for investors with a high risk appetite and a long investment horizon.