Every startup IPO comes with a prospectus that runs to hundreds of pages, and most people, founders included, read the price band and the grey market premium and stop there. That is a mistake, because a prospectus is the most honest document a startup will ever publish about itself. Zetwerk's ₹5,012 crore issue, which closed on 19 October 2026 with listing scheduled for 23 October, is a good one to practise on: it has strong revenue growth, large losses, a business it is exiting and a big chunk of money going to repay debt.
Here are five questions to ask of any startup's offer document, using Zetwerk's numbers as reported by the business press.
1. Where is the money actually going?
An IPO has two parts, and they mean very different things.
The fresh issue is new money that goes to the company.
The offer for sale (OFS) is existing shareholders selling. That money goes to them, not the business.
Zetwerk's issue had a fresh issue of ₹2,830 crore (raised from ₹2,600 crore proposed earlier) and an OFS of 14.45 crore shares, worth about ₹2,182 crore at the top of the ₹143 to ₹151 band, according to Energetica India. Sellers in the OFS included the co-founders, a promoter group entity, and early investors such as Peak XV Partners, Lightspeed and Accel.
Then look at the "objects of the issue." Of the fresh issue, about ₹2,160 crore is earmarked to repay or prepay borrowings, with the rest for acquisitions and general corporate purposes. That is not a red flag on its own. Paying down debt cuts interest costs, and one brokerage, quoted by Business Today, estimated the saving at ₹180 to ₹220 crore a year. But it tells you this IPO is mainly about strengthening the balance sheet, not funding a new growth bet.
Founder lesson: when you raise, whether privately or publicly, investors will ask the same question. "Where does the money go?" should have a specific answer, and "repaying debt" needs a story about what the business does once the interest bill shrinks.
2. Is the revenue growth real, and where is it coming from?
Zetwerk's revenue grew about 40% in FY26 to around ₹15,900 crore, and 55% year on year in the June 2026 quarter to ₹4,117.9 crore, per Energetica India. Those are strong numbers for a company of that size.
The question to ask next is whether growth comes from a few large customers or many. Business Today's summary of brokerage notes cited 1,802 customers in FY26 and a network of 6,979 third-party suppliers. For a manufacturing platform, that breadth matters: it reduces the risk that losing one buyer sinks a quarter.
Note too that different sources quote slightly different revenue figures, such as operating revenue versus total income. That is normal. Decide which line you are comparing before you compare it with anything else.
3. Are the losses operating losses or one-offs?
This is where most headlines mislead. Zetwerk's FY26 net loss widened to about ₹1,606 crore from ₹370.7 crore. Read alone, that looks alarming.
Inc42's breakdown shows what sits inside it: a ₹796.4 crore exceptional charge tied to changes in share conversion ratios, and a ₹453 crore impairment on its civil infrastructure business, which it has discontinued. In the June 2026 quarter, of a ₹733 crore loss, ₹668.9 crore came from discontinued operations and ₹64.1 crore from continuing operations.
That changes the picture. The continuing business is still loss-making, but far less so than the headline. The useful habit: always split losses into continuing operations, discontinued operations and exceptional items before forming a view.
Founder lesson: exiting a business line is expensive, and the cost lands in your numbers long after the decision. If you are carrying a side bet that is not working, the earlier you close it, the less it pollutes the numbers investors will later scrutinise.
4. What are you paying for the business?
At the top of the band, Zetwerk was valued at about ₹25,583 crore. Brokerages put that in context in different ways, as Business Today summarised:
SBI Securities noted an FY26 EV/EBITDA of 66.5 times and price-to-sales of 1.6 times.
Swastika Investmart compared roughly 1.6 times FY26 revenue with 3.5 to 6 times for electronics manufacturing services peers, attributing the gap to lower margins and losses.
Ratings ranged from "Subscribe" (ICICIDirect, SBI Securities, Ventura) to "Neutral" (Swastika) and "Avoid" (BP Equities, citing persistent losses).
A low price-to-sales multiple is not automatically cheap. It often reflects thin margins. The question is whether margins can improve, and how quickly.
5. Who else is buying, and on what terms?
Before the IPO opened, Zetwerk raised ₹2,251 crore from anchor investors at ₹151 a share, the top of the band. Domestic mutual funds took about 46% of the anchor book, and global investors including Capital Group's Smallcap World Fund took large allocations, according to Inc42.
Anchor demand at the top of the band is a signal of institutional confidence. It is not a guarantee of anything. Anchors have their own time horizons and lock-in periods, and their decisions are based on the same documents you can read.
The habit worth building
You do not need to read 400 pages. You need to read the right 30: the offer structure, the objects of the issue, the restated financials with their notes on exceptional items, and the risk factors. Do that for two or three IPOs in your sector each year and you will understand public-market expectations better than most commentary will teach you.
And if you are building towards an IPO someday, read them as a preview of your own. Every number in Zetwerk's documents is one that a founder once had to explain to a board. Building the business so that those explanations are short is most of the job.
This is analysis of public information, not investment advice.
