India’s new-age tech IPO market saw a massive upswing in 2024, driven by increased investor confidence and a favourable macroeconomic environment. What does 2025 have in store for startups looking to join the IPO spree and enter the big leagues?
As many as 13 new-age tech startups made it to the public markets in 2024, cumulatively raising over INR 29K Cr ($3.4 Bn). And in 2025, this number is expected to double with at least 23 new-age tech startups eyeing a public listing, and looking to raise more than INR 55K Cr ($6.4 Bn) cumulatively.
As predicted in the beginning of the year, the general elections in 2024 played a pivotal role in the IPO numbers. In fact, in the startup ecosystem, only five startups got listed before the elections while the rest hit the market once there was more stability post the election results. In 2025, while no such major events are due, ongoing macroeconomic uncertainties like GDP downfall might make the public market volatile from time to time.
However, given India’s strong position in the equities market compared to other global markets, experts believe that the IPO market is expected to stay bullish overall with the total worth of public offerings surpassing $20 Bn as against $16 Bn in 2024.
In Q3 2024 alone, India saw 27 IPOs, marking a 29% surge from the corresponding quarter of the previous year. These companies cumulatively raised $4.27 Bn or close to INR 35,000 Cr, registering a 142% increase year-on-year (YoY).
With that, the domestic market commanded a 36% share of total listings in Q3 2024, surpassing the US, which held a 13% share. To be noted, some of the top IPOs of this season included Swiggy, Bajaj Housing Finance, Ola Electric, FirstCry and India’s largest-ever IPO, Hyundai Motor India.
The new year is expected to be more eventful as the highly anticipated public offerings of companies such as Flipkart, PhysicsWallah, Ather Energy, Zepto, HDFC Credila, and even the Indian arm of consumer electronics giant LG are expected to go to the public markets.
Lightspeed India managing director Anuj Bhargava believes that the public markets trends of 2024 will continue well into 2025 and the momentum is expected to be strong.
“Though we have seen some recent softening, which was expected, fundamentally, nothing has changed. Domestic capital inflows remain strong and are getting stronger. While foreign investment inflows have been sporadic, I think that was also expected. And the market today is held together, in large parts, by domestic institutions, which was not the case a couple of years ago,” said GFC’s Bhargava.
In 2025, Lightspeed is looking to book profits from some of its high-profile portfolio startups such as PhysicsWallah, OYO, Zepto, and Zetwerk.
Besides Lightspeed, a number of other VCs would be hoping for similar outcomes in 2025. Peak XV Partners managing partner Ishaan Mittal, for example, said that the VC major continues to be excited about the opportunity in the public markets given the trends are extremely positive both on the supply side of securities and the demand side.
“On the supply side of securities, which includes the companies going public, we have just seen the tip of the iceberg as we speak. Many market-leading, exciting companies are yet to go public in every sector – whether consumer brands or consumer internet companies like Meesho, fintech companies like Groww, or payments companies like Pine Labs and Razorpay. In the next 12-18 months, many of these companies will go public,” he added.
Mittal believes that domestic capital and foreign capital investors are showing great interest in IPOs and their keenness to participate in the Indian public markets is evident from the reception for some stocks.
Over 20 New-Age Tech Startups Line Up For IPOs In 2025
Within the tech startup ecosystem, at least 23 companies are gearing up for public listings next year, which would further add to the new-age tech stocks baskets for potential investors.
The list includes Ather Energy, BlueStone, CarDekho, CaptainFresh, Ecom Express, Fractal, Infra Market, IndiQube, ArisInfra, Innoviti, OfBusiness, Ola Cabs, Pure EV, Physics Wallah, Ullu, Smartworks, among several others.
These startups are set to raise more than $6 Bn cumulatively in the process of fundraising via IPOs, as things stand. Depending on the market conditions, some of these companies might decide to trim the size of their IPOs.
Of this, already nine startups have filed their respective DRHPs with the Securities and Boards of India (SEBI). Coworking space provider Smartworks and logistics startup Ecom Express have already received the market regulator’s approval to file an IPO.
A Surge In Tech-Enabled Startups Going Public
Unlike the past three years, when startups that made the public market debut were largely tech companies, in 2025, there is a big wave of tech-enabled startups eyeing public listings.
For instance, BlueStone is a D2C jewellery brand with an online presence as a part of its business model. PhysicsWallah, looking to become the first Indian edtech platform to public, is also offline-heavy at the moment. Even though the startup has a major student base online, a significant 40% of its total revenue is from offline coaching centres.
Similarly, the coworking space providers Smartworks, IndiQube, ArisInfra, DevX as well as WeWork and Table Space (also preparing for listing within a year or two), are platforms that use technology to enable their business processes, but in terms of the business model, they are largely similar to their traditional counterparts.
Pointing to this trend, Aakash Agrawal, associate director, digital and new-age business at brokerage firm Anand Rathi, said that it will be important for the public market investors to be able to differentiate between pure-play tech companies and tech-enabled companies as that would be essential in deciding the valuation premium they can claim and growth opportunities they have.
“Take the example of OfBusiness. While it’s a solid company with good profitability, we must also appreciate that it is essentially a trading company with a tech aspect to it. So, what kind of multiples does it find for itself? How does it price its IPO given it’s a technology company as well? These factors are going to be very interesting to see next year,” said Agrawal.
What Explains The Coworking IPO Boom?
Meanwhile, it is also interesting that there is a sudden surge in coworking space IPOs after Awfis made its successful public market debut in 2024. The market is attributing this trend to an increasing demand for flexible workspaces.
A CEO at one of the leading coworking space provider companies told Inc42 earlier this year that India’s growth narrative, coupled with a commercial real estate boom, is creating a conducive environment for flexible workspace startups.
However, as the market gets cluttered, it would be interesting to see if all the impending coworking space IPOs emerge victorious in their IPOs in the coming months.
Speaking on the matter, Amit Ramani, CMD at Awfis, said that as coworking spaces prepare to enter a potentially crowded public market over the next 12–18 months, their success in securing favourable investor responses will hinge on several key factors, including financial health and profitability with investors focusing on companies that demonstrate sustainable revenue streams, robust growth trajectories, and resilience to market fluctuations.
“Differentiation will play a critical role, with coworking spaces standing out by offering unique value propositions such as advanced technology integration, premium amenities, sustainable features, and services tailored to specific industries… Scalability and market penetration will be vital; companies with a diversified geographical presence and the capacity to scale seamlessly are likely to be viewed as more viable. Lastly, adaptability to evolving work trends – such as hybrid and remote work – through flexible offerings and innovative solutions will be crucial,” Awfis’ Ramani told Inc42.
More Exits, Higher Returns In 2025?
With the tech startup IPO boom, profitable exits are becoming super critical for VC funds and PEs.
After the 2021 IPO boom, 2024 brought a deja-vu moment for the PEs and VCs in India as the total gross exit value was $1.8 Bn in 2024, close to $2.3 Bn in 2021. Amid a global IPO market slump that had also adversely affected India’s stock market, the total gross exit value dipped to $700 Mn in 2022 and $1 Bn in 2023.
Next year, top private investors including the likes of Lightspeed, PeakXV, Accel, and SoftBank are eyeing far more gains by offloading stakes in both pre-IPO rounds and during the IPOs. Even though some VCs and PEs might sell some stakes at a loss, it will be compensated by high returns from other portfolios.
“Our focus is to continue to invest with a strong belief that we, in the venture capital industry, now have a very viable path to exit, not just a very strong IPO market about that, but also a strong pre-IPO market,” added Lightspeed’s Bhargava.
Pre-IPO Rounds To Get Increasingly Important
The concept of pre-round IPO is also undergoing a shift. As Bhargava pointed out, traditionally this term was narrowly defined and it was a financing round just ahead of a company’s IPO to set a benchmark for the eventual IPO.
“Now anything up to two years before an IPO is also a pre-IPO round. In addition to traditional crossover funds, lots of new pre-IPO funds have come up. We’ve seen family offices and HNIs being exceptionally active in this market. We expect this trend to continue,” he said, adding that the firm will certainly use pre-IPO rounds as an opportunity to exit some of its portfolio startups.
Meanwhile, the Lightspeed MD also noted that several technical and fundamental dynamics decide the VC firms’ decision around partial and complete liquidation.
“I think investors largely use IPOs as a partial liquidity sort of event, and then gradually exit over time. Similarly, on the pre-IPO side, people look to monetise also because we don’t want to go into an IPO with a very large shareholding from one shareholder. It places a bit of an overhang on the stock,” he added.
Besides, it’s important to note that in most cases, these VCs are also reaching the end of their fund cycles and they have to realise profits to give return to their investors.
The Fate Of Large Sized IPOs
With the successful IPOs of Hyundai and Swiggy in 2024, which were two of the largest IPOs in the history of the Indian equity market, the trend of large-sized IPOs are set to persist in the new year.
Anand Rathi’s Agrawal said that while the small and mid-sized IPOs will be more frequent, there will also be 10-20% of the companies, which are eyeing large IPOs such as PhysicsWallah, Infra.Market and OfBusiness.
“We think the IPO market will have secular growth next year. And these companies that will have large IPOs are private equity backed, raised a lot of private capital, and scaled up significantly, which warrants a large IPO,” he added.
Even though it was evident this year that many new-age tech startups, including ixigo, FirstCry, Ola Electric, MobiKwik reduced their respective IPO sizes from earlier planned, Peak XV’s Mittal believes that the scale of offering have no bearing on the success or failure of IPOs if the fundamentals are strong.
Answering The Valuation & Profitability Questions
The verdict of the market is clear when it comes to profitability – become profitable ahead of the IPOs or show a clear path to profitability in the near term. This sentiment is not going to change in 2025.
However, the recent IPOs of MobiKwik, Ola Electric and Swiggy (to some extent) have proven contrary to these expectations.
Some investors believe that sometimes household names, clear growth opportunities, and exposure to niche market segments might cause such exceptions but largely, profitability and strong unit economics are a must for the public market. Peak XV’s Mittal said that profitability must be and will continue to be key for companies going IPO, however, this factor also needs to be contextualised.
“This is a good time where founders and investors alike are focusing on profits. They are able to generate those profits without hurting the core of the business or without taking away from the future of the business. While profitability is important, we don’t want to compromise on the future potential of the company to optimise for short-term profits, we would rather optimise for long-term profits.”
Taking a slightly different perspective, Lightspeed’s Bhargava argued that unlike in the US where companies with less than $10 Bn or $15 Bn in valuation do not receive much attention in the IPO market, Indian investors are open to much smaller valuations.
“Promoters, founders, and early-stage investors are also conscious that you cannot price an IPO where you bring nothing to the table near term for incoming investments. At the same time, the IPOs cannot be very small because the companies need institutional investors following, index inclusion, liquidity in the market. But the point is, you also do not need to be a billion-dollar company to list in India,” Bhargava said.
On the other hand, it goes without saying that profitable companies can command a premium in terms of the valuation.
“Ultimately it boils down to growth, free cash flow, and profitability. Wherever there is an opportunity to grow, we will see promising valuations. Sometimes valuations might be slightly steep given that they are accounting for a future market opportunity and scalability. Zomato has been an example of it earlier. Swiggy too cashed on that,” said Anand Rathi’s Agrawal.
Where Will FIIs Trend In 2025?
As per various publicly available data, Foreign Institutional Investors (FIIs) sold a net of INR 1.14 Lakh Cr in October 2024, the highest selling in a month so far, surpassing the numbers of Covid-19 pandemic period in March 2020.
Amid many currently seeing the Indian market as overvalued, rising inflation, and a few other global macroeconomic factors, in 2024, FIIs have been the biggest sellers.
Even though this has caused volatility in the market, the Domestic Institutional Investors (DIIs) kept buying. In October alone they made the highest purchase of more than INR 1 Lakh Cr.
The market experts believe that FIIs selling will not impact the upcoming IPOs of 2025 as DIIs will remain strong and mutual funds are booming.
Even retail investors are expected to show continued support even to the new-age tech startup IPOs given these investors now have an improved understanding of the peculiarities of these businesses.
“If FIIs stop deploying capital, then it causes a larger problem. But currently, there’s no sign of that. And in fact, India is looked at as a sweet spot in the developing world,” Agrawal said.
Macro Policies Could Impact IPOs
Sector-focussed policies play an important role in driving stock performances and even the companies going public.
Devang Kabra, fund manager at Wallfort PMS, said that the policies the government tabled in the winter session of the Parliament will be one of the areas to watch out for.
“For example, there is an Insurance Amendment Bill proposing 100% FDI, allowing relaxations for net worth requirements for companies to become insurance companies is tabled. Once it passes, we will see many big insurance brokers turning themselves into insurance companies and coming out with IPOs,” Kabra said.
He said that once a policy decision happens, it impacts several other industries down the line. This Insurance Amendment Bill might lead to IPOs of more hospitals.
The Donald Trump Effect On Indian Tech IPOs
To quote global brokerage Bernstein, “Trump’s return through high-profile US elections added new layers of complexity to inflation dynamics and geopolitical assessments… How will global inflation pan out with Trump at the helm, and will export be a more critical area to focus on than domestic cycles?”
It is important to note that Trump’s win strengthens US’ “China+1” strategy, which is expected to give India a boost in its manufacturing sector.
JM Financial said in a research report that China, Mexico and Canada will likely attract higher tariffs, which could provide India with the benefits in a number of manufacturing segments — chemicals, auto components, electrical components, solar panels and solar cells, tiles and other categories.
Wallfort PMS’ Kabra also believes that the manufacturing sector will now pick pace further and there will be stronger ground built for their IPOs.
However, domestic IT companies now might have to deal with stronger immigration rules in the US. Plus, there is higher inflationary pressure and increasing pressure on the Indian rupee. These volatile situations are less likely to impact the IPO sentiment in the long run in 2025, however, some short-term cautiousness is likely to linger in the early months.
Corporate Governance Blues For IPO-Bound Startups
As the domestic market braces for a record year in the history of public markets, as predicted by market experts, it will also be key for the companies, especially new-age tech startups, to ensure transparent governance and clear strategic vision.
After all, public markets are sensitive to these core factors. The recent incident of hoards of complaints against Ola Electric’s products and services and the negative impact of it on its stock is a case in point.
While many believe that startups are riding the IPO boom without being ready enough to function in a public market, Gautham Srinivas, Partner, capital markets at Khaitan & Co., said that all the companies preparing to go public have the utmost checks in place to meet the regulatory requirements.
“Public issues are not a one-month process. To file DRHP, a company needs two to three months. So, an absolutely thorough check gets done. All the upcoming new-age companies are equipped to handle a public issue from a regulatory point of view given the standards of governance they already maintain,” Srinivas added.
Edited By Nikhil Subramaniam
