Mumbai’s IPO Landscape: New-Age Companies Brace for 2025
As the financial landscape evolves, new-age companies in Mumbai are gearing up for a significant year ahead. With several startups eyeing public debuts in 2025, the anticipation is palpable. However, these companies may need to temper their valuation expectations and reassess their IPO timelines due to geopolitical uncertainties and external market factors that could impact investor sentiment.
The Emerging Players
Among the startups looking to make their mark in the public markets are Zepto, PhysicsWallah, and OfBusiness. These companies are part of a growing trend where new-age firms are increasingly considering IPOs as a viable route for raising capital. Additionally, Ather Energy has already filed draft IPO papers with the Securities and Exchange Board of India (Sebi), indicating a robust pipeline of public offerings.
Market Dynamics and Valuation Concerns
Recent shifts in the Indian markets have raised concerns about valuations. Neha Agarwal, MD & head of equity capital markets at JM Financial Institutional Securities, highlighted that choppy market conditions and narrowing benefits over China are prompting companies to reconsider their valuation strategies. The geopolitical landscape, particularly with the uncertainties surrounding Donald Trump’s potential pro-growth policies in the U.S., has made global asset allocators more cautious about emerging market investments.
Abhinav Bharti, MD at JP Morgan India, echoed these sentiments, noting that external factors could lead to adjustments in IPO valuations. Despite these challenges, the overall IPO activity is expected to remain strong, buoyed by solid domestic fundamentals.
A Successful Year for Startups
The IPO market has seen a resurgence in 2024, with new-age companies raising over Rs 25,000 crore, marking their best fundraising year since 2021. High-profile listings such as Ola Electric, FirstCry, and Swiggy have set a positive tone for the market. Swiggy, despite facing market turbulence, successfully launched its IPO at a valuation of $11.3 billion, down from an initial target of $13 billion. This IPO became the second-largest public issue of the year, following Hyundai Motor India’s massive Rs 27,870 crore offering.
The success of these IPOs has encouraged more startups to expedite their listing plans. Bharti noted that many companies are actively evaluating their readiness for public markets, with a notable trend of firms re-domiciling to India to take advantage of being listed on local exchanges.
Navigating Global Headwinds
While the path to an IPO may be fraught with challenges, the depth of the domestic market is expected to support new-age companies in their public offerings. Investment bankers predict that technology firms, along with those in consumer and financial services, will dominate the IPO landscape in 2025. Gaurav Sood, MD and head of equity capital markets at Avendus Capital, emphasized that public markets are becoming increasingly attractive for these companies, providing access to substantial growth capital that private markets may not offer.
Future Outlook
Looking ahead, new-age companies are projected to account for approximately 15-20% of the estimated $10-15 billion expected to be raised through IPOs in the coming months. Sudarshan Ramakrishnan, co-head of India investment banking at Goldman Sachs, anticipates that India’s overall equity issuance in 2025 will surpass that of 2024, driven by robust economic growth, a burgeoning middle class, and ongoing digital transformation.
Conclusion
As Mumbai’s new-age companies prepare for their public market debut, they face a complex landscape shaped by both opportunities and challenges. While geopolitical uncertainties loom, the resilience of the domestic market and the successful track record of recent IPOs provide a hopeful backdrop for these startups. With strategic adjustments and a keen eye on market dynamics, the 2025 IPO landscape promises to be a pivotal moment for many emerging players in the Indian economy.