India’s Stock Market Set for a Surge in Tech IPOs
India’s stock market is on the brink of a significant transformation, with a wave of high-profile initial public offerings (IPOs) expected in the coming years. According to a report by Bloomberg, over three dozen tech startups, collectively valued at around $100 billion, are gearing up to go public by 2027. This anticipated influx of listings signals a potential revival in the country’s equity markets, which have experienced a slowdown in stock sales recently.
Leading the Charge: Major Players Preparing for IPOs
Among the companies poised to make their public debut are some of India’s most recognized tech firms. Walmart-backed e-commerce giant Flipkart, digital payments leader PhonePe, and hospitality provider Oyo Hotels are at the forefront of this movement. These companies are looking to capitalize on India’s public markets, which ranked as the world’s second-largest for share sales last year, despite a recent dip in momentum.
The Rainmaker Group, an Indian investment bank, highlights that the upcoming wave of IPO hopefuls is in a stronger financial position compared to their predecessors. Many startups that went public during the 2021-2022 boom faced significant challenges post-IPO. For instance, fintech firm Paytm saw its value plummet by approximately 63%, while beauty retailer Nykaa has experienced a 4% decline since its public offering.
Financial Health: A Positive Shift
Kashyap Chanchani, managing partner at Rainmaker, emphasizes that the financial health of companies preparing to list in the next two years is markedly better than those that previously entered the market. He notes that two-thirds of the firms eyeing IPOs are already profitable and have improved transparency, making them more appealing to potential investors. This shift in financial stability could play a crucial role in attracting investor interest and confidence in the upcoming IPOs.
Challenges Ahead: Economic Uncertainty and Market Volatility
Despite the optimism surrounding these upcoming IPOs, the Indian stock market faces several challenges. The number of share sales in the country dropped by 34% in the first quarter of 2025, largely due to broader market volatility that has dampened investor appetite. After nearly a decade of continuous gains, the benchmark NSE Nifty 50 Index began to decline in late 2024, driven by slowing economic growth and downward revisions in corporate earnings forecasts.
In this context, IPO proceeds, including block sales and share placements, nearly halved to $7.1 billion in the first quarter, placing India behind competitors like Hong Kong and Japan. However, dealmakers remain hopeful for a rebound, with significant offerings on the horizon, including a potential $1.7 billion listing from LG Electronics’ India unit and a $400 million IPO from electric scooter manufacturer Ather Energy.
Exit Opportunities for Major Investors
A resurgence in startup IPOs would provide vital exit opportunities for major investors such as SoftBank Group Corp. and Prosus NV. SoftBank’s Vision Fund holds stakes in companies like Oyo, eyewear retailer Lenskart, and used-car marketplace CARS24, while Prosus has invested in e-commerce firm Meesho and home services platform Urban Company. Chanchani notes that these investors are sitting on substantial gains in several companies and are now looking to public markets for liquidity. However, he warns that IPOs must be priced carefully, as retail investors are becoming increasingly cautious about inflated valuations.
The Broader Landscape: Governance and Investor Sentiment
While India boasts one of the world’s largest startup ecosystems—trailing only the U.S. and China—it has also faced challenges related to corporate governance, valuation slumps, and unprofitable business models. Many startups have been forced to downsize, cut jobs, or even shut down entirely. The struggles of Byju’s, once a standout in India’s edtech boom, illustrate how quickly investor sentiment can shift. Governance issues and financial mismanagement have significantly eroded confidence in the company.
As the Indian startup IPO market prepares for its next chapter, one of the critical questions investors are asking is whether they can trust the founders behind these companies. The answer to this question may ultimately determine the success of the next generation of public companies in India.
Conclusion
The upcoming wave of tech IPOs in India presents both opportunities and challenges. While the financial health of many of these companies appears promising, the broader economic landscape and investor sentiment will play crucial roles in shaping the future of the Indian stock market. As the country’s startup ecosystem continues to evolve, the ability of these firms to instill confidence and trust among investors will be paramount in navigating the complexities of going public.