India’s tech start-ups hearth up public markets amid valuation issues | EUROtoday

India’s start-up itemizing rush has proven no indicators of slowing down lately – and this week has been no completely different.

One unicorn – a tech start-up valued at greater than $1bn – has made its debut on the nation’s inventory markets, and two extra are within the offing.

The $821m (£623m) share providing of eyewear options agency Lenskart, based by a flamboyant Shark Tank India decide, was offered out in lower than a couple of hours regardless of mind-boggling valuations. It had a shaky market debut on Monday.

The different large firm debuting on the exchanges on Wednesday is Groww – the nation’s largest retail brokerage backed by Microsoft CEO Satya Nadella. Its subject received 17 instances extra demand from traders than the variety of shares accessible on the market. Pine Labs, a fintech unicorn, will record later within the week.

These listings come amid an already hectic start-up IPO (preliminary public providing) season that is seen a various vary of as soon as fledgling tech companies – from house companies platform Urban Company to YouTube channel turned ed-tech unicorn Physics Wallah – tapping the inventory marketplace for investor {dollars}.

The dizzying fundraising frenzy has raised a number of uncomfortable questions in regards to the costly valuations commanded by these often-unprofitable beginner firms. But consultants say it additionally alerts a maturing of India’s start-up ecosystem after a painful funding winter the place cash had all however dried up and early-stage enterprise capitalists had been discovering it tough to money out.

The new wave of IPOs is lastly giving many funds an opportunity to exit their early bets.

“Exiting our investments was one of the prominent concerns when we were raising our fund in 2015-16, so these are really encouraging times for us,” Anil Joshi, an angel investor who’s funded round 100 early-stage startups, informed the BBC.

Shailendra Singh, managing director of PeakXV Partners – a worldwide enterprise capital agency which has some $9bn invested throughout a number of high-profile Indian start-ups together with Groww and Pine Labs – attributes the sturdy demand for these IPOs to raised regulation and a wider range of individuals, together with small mom-and-pop traders, mutual funds and insurers, pumping cash into India’s fairness markets.

“Historically there was no appetite for these high growth companies. This has now changed,” Shailendra Singh stated. “Because with more market participants, a more diverse set of companies are hitting the market.”

A flush of cash from these new traders has fired up some 43 start-up IPOs this 12 months until the start of November. That’s 5 instances the variety of start-ups that went public in 2020 and a doubling since 2023, in response to information shared by market intelligence agency Tracxn.

But there may be rising concern that whereas many of those IPOs are delivering substantial earnings to early traders who’re cashing out, new traders – abnormal individuals shopping for the shares for the primary time – have little probability of creating a revenue afterward.

While admitting that valuations are “structurally high” in India, Shailendra Singh says tech firms with very excessive working margins are likely to commerce richly, not simply in India, however the world over.

He believes start-up founders must be smart when pricing their shares for the general public, since they owe an obligation to guard small traders’ cash. But he would not assume each start-up IPO is overpriced or unfair.

Several start-up IPOs like Zomato, Nykaa, Ixigo and others have generated terrific returns for traders, stated Shailendra Singh.

What has additionally modified is that “today’s listings are grounded in profitability and good governance”, Anand Daniel, accomplice at enterprise capital agency Accel, informed the BBC.

“Strong businesses with clear fundamentals are going public, while some start-ups go back to the drawing board and reassess the future.”

According to Neha Singh, co-founder of Tracxn, at the same time as mature start-ups go public, fewer Indian start-ups general are having to wind up or return to the drafting board – an encouraging pattern.

This is presumably as extra founders more and more prioritise “sustainability, profitability, and disciplined capital use over aggressive expansion”, stated Neha Singh.

Tracxn information exhibits simply 724 start-ups shut down up to now in 2025 a decline of 81% in comparison with over 3,900 startups downing the shutters throughout the identical interval in 2024, a determine which was itself down on earlier years within the decade.

The sector is transitioning from “rapid growth” to “strategic sustainability”, Neha Singh stated.

But at the same time as extra founders increase cash by IPOs, personal fairness and enterprise capital funding into new firms hasn’t returned to Covid-era highs.

At $9.8bn, funds raised by India’s tech start-ups in 2025 are nonetheless a shadow of the $40bn raised in 2021, and marginally decrease than final 12 months’s $12.6bn.

“We’ve moved from a phase of exuberance to one of thoughtful capital deployment. Deal volumes may be lower than the peak years, but the quality of companies being funded is higher,” says Mr Daniel.

While founders who’ve centered on high quality, profitability and governance will proceed to seek out capital, the market has develop into extra discerning, provides Mr Daniel, “which is ultimately good for founders building for the long term”.

But current coverage measures, such because the abolition of an angel tax, are anticipated to additional strengthen investor confidence in India.

As for start-up IPOs, might the momentum proceed subsequent 12 months?

“The capital markets are inherently cyclical and it is impossible to say whether 2026 will be the same,” says Shailendra Singh.

For now, although, personal traders are making hay as the general public markets lap up stakes within the start-ups they positioned early bets on.

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