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More than three dozen Indian tech startups, collectively valued at $100 billion, are expected to go public by 2027, signaling a potential rebound in stock market activity in the country. This projection comes from one of India’s leading deal advisers specializing in internet companies. Major firms such as Walmart-owned Flipkart, digital payments giant PhonePe, and hospitality provider Oyo Hotels are among those planning to list in India, which was the world’s second-largest market for share sales last year but has since slowed down.
Most of these companies preparing for initial public offerings (IPOs) have managed to balance rapid growth with profitability, according to a report by The Rainmaker Group, a domestic investment bank. Kashyap Chanchani, managing partner at Rainmaker, noted that young companies are now in stronger financial positions compared to 2021 and 2022, when several startups that entered the market with high valuations struggled post-listing. For instance, Paytm has declined by approximately 63% since its IPO, while Nykaa has dropped 4%.
“The financial health of startups set to list in the next two years is significantly better than those that went public earlier,” said Chanchani, who helped Indian startups raise $1 billion in equity last year. “Two-thirds of these firms are already profitable, and they are also improving transparency.”
Rainmaker’s clients have included Oyo and e-commerce platform Swiggy, and the firm typically earns a share of the fundraising deals it facilitates. However, it does not advise companies on IPOs.
India’s share sales dropped by 34% in the first quarter of this year as the stock market faced headwinds. The benchmark NSE Nifty 50 Index, which had risen for nine consecutive years, began declining in late September due to an unexpected economic slowdown and downgraded corporate earnings forecasts. First-quarter proceeds from IPOs, block sales, and share placements in India nearly halved to $7.1 billion, falling behind Hong Kong and Japan.
Despite this, Chanchani and other bankers predict a resurgence in deal activity in the coming months, with several high-profile listings expected. These include LG Electronics’ Indian unit, which may raise up to $1.7 billion, and electric scooter manufacturer Ather Energy, which could raise around $400 million.
A new wave of startup IPOs would provide much-needed exits for major investors like SoftBank Group Corp. and Prosus NV. SoftBank’s Vision Fund holds stakes in companies such as Oyo, Lenskart, and CARS24, while Prosus has invested in Meesho and Urban Company. “These investors have a dozen companies where they are sitting on massive gains, and several are now exploring public markets,” Chanchani said. However, he cautioned that IPOs must be priced carefully to avoid rejection by retail investors wary of inflated valuations.
Companies going public will need to address investor concerns about India’s slowing economy and earnings growth. Some newly listed stocks have also declined after IPO lockup periods expired, adding pressure to a market that has already lost hundreds of billions of dollars since late last year.
India’s startup ecosystem remains one of the largest globally, trailing only the U.S. and China. However, it has also faced significant challenges, including corporate governance failures, plummeting valuations, and vanishing profits. Many young firms have been forced to cut jobs and scale back growth plans, while others have collapsed entirely. The downfall of Byju Raveendran’s online tutoring business exemplifies how even once-promising companies can falter as investors lose faith in their founders.
“One of the key questions investors often ask us is—can we trust the founders?” Chanchani said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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