India’s first-quarter proceeds from IPOs, block sales, and share placements dropped to $7.1 billion, falling behind Hong Kong and Japan. However, a wave of public listings by over three dozen tech startups, collectively valued at $100 billion, is expected by 2027, signaling a potential market rebound.
Among the firms preparing to go public are Flipkart, PhonePe, and Oyo Hotels. These companies have found a balance between rapid growth and profitability, a factor missing in previous IPOs that led to stock crashes, such as Paytm’s 63% decline and Nykaa’s 4% drop.
According to The Rainmaker Group, which advises Indian startups, the financial health of upcoming IPO candidates is significantly better than those listed in 2021 and 2022. Two-thirds of these firms are already profitable and are focusing on transparency, which could help them avoid past pitfalls.
Despite a 34% drop in IPO activity in the first quarter due to market fluctuations, experts predict a resurgence in stock sales. LG Electronics’ Indian unit may raise up to $1.7 billion, while electric scooter maker Ather Energy could secure $400 million.
The expected IPO boom presents a crucial exit opportunity for investors such as SoftBank and Prosus, who hold stakes in companies like Oyo, Lenskart, and Meesho. However, valuations must be carefully set, as retail investors remain wary of overpricing.
Challenges persist, including concerns over India’s slowing economy and corporate governance issues in the startup ecosystem. Some companies have had to scale back operations, while others, like Byju’s, have struggled with investor confidence.
A key question for potential investors remains: Can they trust the founders? Ensuring transparency and sustainable growth will be essential for Indian startups looking to succeed in the public markets.
