STARTUP IPO RUSH HITS ITS MOMENT OF TRUTH

With record retail participation and a strong listing pipeline, India's startup IPO wave faces its biggest test in delivering long-term value

- By Resham Suhail

ON THE HEELS of a bustling IPO season, the capital markets are showing a move from quantity to quality.

Despite a 30 per cent dip in deal count in H1 2025, the $4.6 billion raised by 108 listings signals a preference for bigger, more financially sound companies. On the mainboard, the capital markets are trimming the fat, ushering in a period where size and financial robustness override the allure of mere novelty or flash. The 2025 IPO narrative is less about frenzy and more about maturity, discipline and a refined investor psyche. While traditional sectors continue to raise significant capital, the spotlight in 2025 increasingly belongs to startups that have captured the imagination of investors and retail participants alike. India’s booming startup IPO wave now faces its most critical challenge which is to deliver sustainable, long-term value beyond the initial market debut.

The New IPO DNA

Startups today are strategically targeting IPO as a pivotal milestone, compelling them to refine business models that withstand the scrutiny of public markets. Ashish Kumar, Co-founder and General Partner, Fundamentum notes, “The founders have matured and the economics have directionally become sustainable and I think every set of new tech IPOs will be better than previous cohorts in aggregate.”

The capital markets’ newfound sophistication is best exemplified by companies like Meesho. Once a poster child for aggressive cash burn typical of early-stage tech startups, Meesho has turned the corner decisively. Reporting a revenue of Rs 7,615 crore in FY24, it restructured as an Indian public entity and engaged global bookrunners ahead of its anticipated $1-billion IPO filing. This highlights a fundamental shift from a 'growth-at-all-costs' mindset to an ethos where profitability and operational rigour are paramount.