KPIs in IPO filings: how to read the numbers a DRHP discloses

KPIs are measures that show how a business performs beyond its accounts. A food delivery company might report orders and average order value. A software company might report annual recurring revenue and customer count. A lender might report assets under management and gross non-performing assets.

In a DRHP, KPIs sit alongside restated financial statements. They help a reader judge growth and quality, but they are chosen by the company, so definitions matter as much as the numbers.

KPIs usually appear in two places. The Our Business section describes the metrics the company tracks. The Basis for Offer Price section, which justifies the price range, lists KPIs again with figures for the period of the restated financials, usually three financial years and a stub period, with definitions and why each matters.

The section also includes a comparison with listed peers on ratios such as price-to-earnings and return on net worth, and shows the weighted average price at which the company issued shares to investors in recent transactions. Together, these let a reader compare the pricing against what past investors paid.

The SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 set the disclosure content in schedules, and Schedule VI covers the Basis for Offer Price. After an amendment in November 2022, as commonly summarised, the filing must disclose the KPIs the company has shared with its pre-IPO investors during the preceding three years, and the audit committee must confirm that these details are disclosed.

The KPIs are to be approved by the audit committee and certified by statutory auditors or a chartered accountant, with a management certification for what appears in Basis for Offer Price and Our Business. The KPIs cover the same period as the restated financial information. They also continue to be disclosed after listing for a period, as the rule states. Industry standards for KPI definitions have applied since April 2025. Check the current SEBI text and circulars as of November 2026.

• Which KPIs: those shared with pre-IPO investors in the preceding three years.
• Who approves: the audit committee, with certification by an auditor.
• Which period: the same as the restated financial information.
• After listing: continued disclosure for a stated period.

This is the part of the prospectus where the company and its bankers explain why the price band is reasonable. It lists strengths, KPIs, a comparison with listed companies and past share issuances. A reader should treat it as the company's argument, not as independent valuation advice.

Start with the peer table. Check that the peers are in a similar business, because Indian listed peers for new-age companies are often few and not exact matches. Compare the same measures: price to earnings, price to sales, return on net worth and net asset value per share. Note when a loss-making company has no price-to-earnings ratio.

Then check the KPI definitions. Two food delivery firms may define an active user differently. A number is useful only if the definition and period match.

First read the definition column. Second, look at the trend over three years and the latest stub period, which is shorter than a year and should not be compared with a full year without adjustment. Third, see whether margins and per-unit numbers improve as volume grows. Fourth, check for KPIs that appear in one year and vanish, which can hide a weak result. Fifth, compare the KPIs with the restated accounts for consistency.

The choice of KPI follows the business. A marketplace shows gross merchandise value, orders, active buyers and take rate. A software company shows annual recurring revenue, net revenue retention and customer count. A lender shows assets under management, net interest margin and gross and net non-performing assets. A consumer brand shows revenue by channel, repeat rate and number of stores or distributors.

Some KPIs are shared across many filings, such as revenue from operations and EBITDA, even though EBITDA is not defined in the accounting standards and companies calculate it in slightly different ways. Read the definition footnote every time.

Be careful when a KPI is described in positive terms but has no comparison year, when a definition changes between periods, or when the company reports a measure such as adjusted EBITDA that excludes costs a reader would treat as normal, such as share-based pay. Check whether the KPI is for the whole company or a single business line, and whether numbers are for the full year or a shorter stub period.

Another sign is a gap between operating KPIs and cash. A company can show rising orders and users while still burning cash, so read the KPI table together with the cash flow statement and the objects of the issue, which show what the new money will be used for.

Ask whether the KPI links to money. Orders matter if each order earns a positive contribution. Users matter if they come back and spend. A KPI that grows while profit and cash do not improve is a weak guide. Also ask whether the metric could be gamed: a free trial can lift sign-ups, and a one-off discount can lift orders.

Check whether the numbers tie to other parts of the filing. Revenue per customer should match revenue divided by customers in the restated statements. If the filing gives a growth rate, recompute it from the table. Differences are worth a closer look in the notes.

Lastly, look at who certified the numbers and what the filing says about methodology. A KPI backed by a clear definition, a consistent period and a reconciliation to the accounts is more reliable than one described only in a sentence.

Headlines often quote a single KPI, such as a record number of customers, without the loss or the definition. Look for the price relative to revenue or profit and the proportion of offer for sale versus fresh issue. For a worked reading, see the DRHP decoded guides on StopDown, such as the Zepto filing.

This guide is general information and not investment advice. Read the filing itself and check with a registered adviser.