Amagi’s Weak Market Debut Signals Caution in India’s Tech IPO Boom

Amagi Media Labs, a cloud software company that helps television networks and streaming services distribute and monetize video content, made a disappointing debut on Indian stock exchanges on Wednesday, with shares opening at a steep discount that caught many investors off guard.

The company's shares opened at 318 rupees on the National Stock Exchange and 317 rupees on the Bombay Stock Exchange, both representing roughly a 12 percent drop from the IPO price of 361 rupees per share. The weak opening came despite the company having raised 1,789 crores (about $196 million) in its initial public offering and seeing investors bid for more than 30 times the available shares during the subscription period.

The muted debut offers a reality check for India's technology sector, which has seen a surge in listings from newer companies. It also raises questions about investor appetite for business-focused software companies, as opposed to the consumer-facing startups that have dominated recent Indian IPOs.

Background

Amagi was founded in 2008 and has grown into a significant player in the global video software market. The company provides cloud-based tools and managed services that help content owners, distributors, and advertisers manage and monetize video across streaming platforms and connected televisions.

The company is notably different from many Indian tech companies going public. Nearly all of its revenue comes from outside India, with approximately 73 percent generated in the United States and about 20 percent from Europe. This makes Amagi a rare export-focused technology listing on Indian exchanges, a distinction that set it apart from the typical consumer-oriented startups that have recently gone public in the country.

Before its IPO, Amagi was valued at $1.4 billion in a private funding round in November 2022, when it raised $100 million led by General Atlantic. The company has attracted backing from major venture capital firms including Accel, Norwest Venture Partners, and Premji Invest.

Key Details

The IPO process began with strong institutional support. Amagi raised approximately 805 crores from anchor investors before the public subscription period opened on January 13. The public bidding ran through January 16, and shares were allotted on January 19 before listing on January 21.

The company offered 816 crores worth of new shares while existing investors sold another 973 crores worth of shares through an offer for sale. Major shareholders including Norwest Venture Partners, Accel, and Premji Invest all sold portions of their holdings, though company founder Baskar Subramanian said the founders themselves did not sell any shares.

"For us as an event, it's a pit stop in a long journey," Subramanian told reporters about the listing.

Despite the weak opening, shares recovered somewhat during the trading day. By mid-morning, the stock had climbed to around 347 rupees on the BSE, representing a gain of about 9.4 percent from the listing price. On the NSE, shares traded around 348.85 rupees, valuing the company at approximately 7,544 crores.

The weak listing performance stood in sharp contrast to market expectations. Before the listing, shares trading on the grey market, where unlisted shares are traded informally, showed only a small discount of 0.28 percent to the IPO price. This suggested investors expected the stock to hold its value or rise slightly, making the 12 percent drop at opening a significant disappointment.

The Company's Financial Performance

Amagi has shown solid financial growth heading into the IPO. The company's operating revenue rose 35 percent year-over-year to 704.8 crores in the period leading up to the listing. The company also reported turning profitable in the first half of the current financial year and is expected to remain profitable for the full year.

What This Means

The weak debut raises questions about investor confidence in business-to-business technology companies, even those with strong growth and profitability. While the IPO itself was heavily oversubscribed, the market's initial response suggests investors may be more cautious about valuations than the strong bidding indicated.

For India's broader IPO market, Amagi's listing represents an important data point as the country sees growing numbers of technology companies going public. Last year saw 18 new-age tech listings, and several major names including OYO, boAt, PhonePe, and Zepto are expected to pursue public listings in 2026.

The listing also highlights a shift in India's IPO market dynamics. As private capital has become more selective in funding late-stage startups, public markets have increasingly become both a financing option for growth and an exit route for early investors. Premji Invest, for example, achieved a 16.8 times return on its investment through the IPO and share sales.

Amagi plans to use the fresh capital raised to invest in technology and cloud infrastructure and to pursue acquisitions, though the company has not identified specific targets. The company's focus on international markets and its status as an export-first business may also help it weather any domestic market slowdowns.