Stock Market Crash: 7 Shocking Reasons Why Top Tech Startups Are Plunging in 2025

India’s new-age tech companies are facing a tough start in 2025, with stock prices plunging between 11% and nearly 60% amid global market volatility. Rising interest rates, geopolitical tensions, and renewed inflation concerns have made investors more cautious. Ola Electric, Zomato, Swiggy, and FirstCry are among the worst hit, trading significantly below their IPO prices. Zomato and Swiggy are under pressure from intense competition in the quick commerce space, while Ola Electric struggles with product quality issues and regulatory scrutiny.

FirstCry and Mobikwik, despite strong listings, have seen sharp declines in valuation. Paytm continues to face challenges due to legal issues and enforcement notices. Meanwhile, Delhivery stands out as a rare gainer after acquiring rival Ecom Express. Overall, investor confidence in tech IPOs has taken a hit, with startups struggling to prove financial stability in a turbulent market.

Stock Market Crash: 7 Shocking Reasons Why Top Tech Startups Are Plunging in 2025

The year 2025 has been challenging for India’s new-age tech companies, with many seeing their stock prices nosedive by 11% to nearly 60% in just a few months. Big names like Ola Electric, Zomato, Swiggy, and FirstCry have been among the worst hit. A mix of global economic instability, higher interest rates, geopolitical conflicts, and inflation fears has rattled investors, pushing them toward safer bets. Adding fuel to the fire, former U.S. President Donald Trump’s recent announcement of steep new tariffs has further unsettled global markets, causing wild swings in stock prices. For startups that went public recently, the turmoil has been brutal, with many trading below their initial IPO prices.

Why Are Investors Losing Confidence?

The broader economic uncertainty has made investors cautious about high-risk sectors like tech. Startups, already grappling with fierce competition and regulatory hurdles, are now struggling to prove their profitability. While some companies managed to attract attention during their IPOs, sustaining investor trust amid shaky market conditions has become an uphill battle.

A Closer Look at Major Players

Zomato: The food delivery giant, led by Deepinder Goyal, has seen its shares slump by 26% since January, closing at ₹209.75 on Monday. The sector is cooling off due to slower growth and intense rivalry from quick-commerce players like Blinkit (owned by Zomato itself), Swiggy’s Instamart, and Zepto. Analysts are growing skeptical too—BofA Securities recently shifted its rating from “buy” to “neutral,” citing concerns about the company’s ability to stay ahead.

Swiggy: Since its market debut in November 2024, Swiggy’s stock has plunged 41%, hitting ₹321.75. The company’s aggressive push into quick delivery has backfired, with quarterly losses widening to ₹799 crore. To make matters worse, a ₹158 crore income tax notice has raised red flags about its financial health.

Ola Electric: Once a poster child for India’s electric vehicle revolution, Ola’s shares have crashed 37% this year, trading around ₹50—a massive 66% drop from its August 2024 listing price. The company is battling over 10,000 customer complaints related to product quality and delayed deliveries. Regulatory probes into alleged payment defaults have further dented its reputation.

FirstCry: Brainbees Solutions, which operates FirstCry, has lost half its market value in 2025. After a stellar debut at ₹641 in August 2024, shares have halved to ₹320.55, mirroring the broader downturn in tech stocks.

Delhivery: The logistics firm offered a rare glimmer of hope, rising 5% on Monday after announcing its ₹1,407 crore acquisition of Ecom Express. However, it’s still down 25% this year, showing that even strategic moves aren’t enough to fully offset market pessimism.

Mobikwik: The fintech player, which listed at ₹440 in December 2024, has nosedived 57% to ₹267.65. Its steep fall highlights how even strong IPO performances can unravel quickly in a volatile market.

Paytm: Shares of One 97 Communications, Paytm’s parent firm, have slipped 20% this year. The company is under scrutiny after the Enforcement Directorate flagged alleged foreign exchange violations involving ₹611 crore, spooking investors.

Honasa Consumer (Mamaearth): The parent company of skincare brand Mamaearth has dipped 11% in 2025, closing at ₹225.30. Rising competition and weak consumer sentiment in the beauty segment have dragged down its stock.

Go Digit: The insurtech startup, which went public in May 2024, has fallen 18% this year to ₹279.70, reflecting broader struggles in the sector.

BlackBuck: Zinka Logistics, BlackBuck’s parent company, has slid 15% since its November 2024 IPO, ending at ₹388.80 on Monday.

What’s Behind the Collapse?

Several factors are at play. First, global headwinds like inflation and geopolitical risks have made investors wary of volatile assets. Second, rising interest rates have pushed up borrowing costs, squeezing cash-strapped startups. Third, Trump’s tariffs have disrupted global trade, indirectly impacting Indian firms reliant on overseas markets.

At home, cutthroat competition in sectors like food delivery and quick commerce is eroding profit margins. Regulatory crackdowns—such as tax notices and probes into compliance issues—are adding to the pressure. For companies like Ola Electric and Paytm, operational missteps and customer dissatisfaction have compounded their troubles.

The Road Ahead

The sharp declines underscore a harsh reality: investors are no longer willing to bank on growth stories without solid financials. Startups are being forced to rethink strategies, prioritize profitability, and address governance gaps. While acquisitions, like Delhivery’s buyout of Ecom Express, may offer short-term relief, long-term survival will depend on sustainable business models.

For now, the mood on Dalal Street remains gloomy. Until global tensions ease and these companies demonstrate clearer paths to profitability, the tech sector’s recovery seems distant. Investors, once optimistic about India’s startup boom, are now waiting for the storm to pass.