Indian Startups Flock to Local Stock Exchanges for Listings
A dozen new-age Indian companies that have filed their draft IPO papers this year are collectively expected to raise over Rs 18,000 crore through fresh share issuances. This trend signifies growing confidence in public markets as a viable fundraising avenue even for mid-to-small startups.
Ecommerce platform Meesho is targeting Rs 4,250 crore, the largest fresh issue in this cohort, followed by edtech firm PhysicsWallah at Rs 4,000 crore. Other companies, including fintech firms Pine Labs and Groww, are looking to raise Rs 2,600 crore and Rs 1,735 crore, respectively. The figures mentioned exclude the offer-for-sale component, which will push the overall IPO sizes higher.
Analysts and investment bankers attribute this trend to robust valuation multiples in public markets and the growing maturity of the domestic startup ecosystem. Smaller companies are opting for the IPO route not only to raise capital but also to provide an exit for their investors. In comparison, five new-economy companies that went public in 2021 and 2022 raised over Rs 25,000 crore in fresh capital.
Reasons Behind the Trend
For many of these companies, going public is an attractive option because the markets are buoyant, and they have reached a certain level of maturity. Key benchmarks are in place, and these companies are either market leaders or profitable, likely to notch up better multiples. Investment bankers note that valuations will depend on market conditions and business performance, including profitability and cash flows.
Companies like Groww and Urban Company have shown significant financial improvements. Groww reported a threefold jump in net profit to Rs 1,819 crore and a 31% rise in revenue to Rs 4,056 crore for fiscal 2025. Urban Company turned profitable in FY25, posting a net profit of Rs 240 crore against a loss of Rs 93 crore in the previous financial year.
Market Conditions and Investor Expectations
Even for loss-making companies, public market investors will look for some level of predictability in metrics such as profitability or cash flows. The trend indicates that India has become the third-largest IPO hub after the US and China for internet companies, with many tech startups preferring to list in India due to better valuation multiples.
Half of the 12 companies are taking Sebi’s confidential route to file their draft prospectuses, allowing them more time to finalize IPO sizes and keep their financials under wraps until they decide to proceed. The reasons for raising fresh capital vary from meeting working capital requirements to funding expansion and investing in research and development.
