Surge in IPOs reshapes venture investing in India.
India, September 13, 2025
A wave of nearly 80 mainboard IPOs raising about INR 1,630 billion is reshaping prospects for startups and investors in India. Market participants say expanded public-market access can broaden exit options and alter fundraising terms, though many early-stage VCs still prefer pre-seed and seed deals where they can shape product and strategy. Investors highlight AI as a practical enabler for millions of small businesses, creating new addressable markets. While IPO interest grows, profitability among candidates is mixed and some firms caution about a crowded B2B AI SaaS market. Observers are watching filings, retail appetite, and AI-driven productivity gains.
Author: Shivani Tiwari | Date: Sep 12, 2025
Lead: Accelerating public listings are reshaping how investors view Indian startups. A surge in mainboard initial public offerings has generated a sizable capital inflow, while investor firms focused on early-stage ventures say the IPO momentum will alter the landscape without changing their ground-up approach.
Investors and founders view the current IPO pipeline as a structural shift. Mainboard activity has boosted available capital and created clearer exit pathways for backers and early employees, making public markets a more tangible milestone for scaled startups rather than a distant dream. This change is drawing renewed attention from retail and institutional participants alike.
Despite the public-market buzz, some venture partners emphasize that their primary impact happens at the earliest stages. They prefer the “blank canvas” phase when founders are solving problems deeply and can benefit from hands-on capital, introductions, and strategic guidance. Their investment thesis is behavior-driven rather than sector-led, favoring founders who design solutions that work with local market realities and intermediary networks rather than replacing them outright.
Artificial intelligence has become a core enabler for many early-stage bets. Investors note that AI not only automates tasks but also unlocks new business models that can reach India’s vast base of small firms. With over 63 million small businesses in the country, there is a large addressable market for workflow tools, affordable systems and decision-support applications. AI is being positioned as the affordable “project manager” these businesses lacked before, enabling higher productivity and scale.
Firms with a behavioral thesis are sector-agnostic but show a slight tilt toward consumer-focused models over pure enterprise plays. They remain cautious about the crowded B2B AI SaaS space, warning that many solutions look similar and chase the same well-known frictions. Instead, they prefer businesses that empower on-the-ground partners and intermediaries.
Portfolio examples cited include startups in renewable energy, education, construction management and logistics, illustrating the breadth of opportunities that fit the behavioral thesis and local market engagement.
Tracking of 42 companies preparing to list shows an even split between profit-making and loss-making firms. The 21 loss-making companies reported a combined shortfall in excess of Rs 12,000 crore, with large contributions from several high-profile names. Observers stress that public markets and many investors look beyond headline net profit numbers. Operating metrics, unit economics and growth-adjusted cash flows often give a more complete picture of IPO readiness.
Regulatory listing criteria do not mandate prior net profit for every company, but stock exchange norms require operating profit or earnings before interest, depreciation and tax in at least two of the three financial years before an application, creating a measurable threshold for many aspirants.
Some firms in the IPO pipeline have reported recent profitability or strong quarterly growth. Several consumer-facing and fintech businesses have declared profits in recent periods, and a few have already filed preliminary paperwork to raise fresh equity. Others have reorganized their corporate structures in preparation for public listings, including domicile shifts and conversions to public company status.
Rising home prices and a shortage of affordable housing continue to influence broader consumer behavior and wealth allocation. A concentration of well-paying jobs in certain cities and stagnant wages for many create demand dynamics that affect consumer startups and real estate-linked ventures. Analysts note a persistent shortfall in affordable homes, which has implications for long-term urban spending patterns.
Reporting contribution from Jayshree P. Upadhyay in Mumbai and Nishit Navin in Bengaluru. Edited by Vijay Kishore and Mrigank Dhaniwala. Opinions expressed by contributors are their own.
A: Mainboard listings in the latest period collectively raised INR 1,630 billion, a notable increase from the prior year.
A: No. Of the 42 tracked startups preparing for market debut, about half reported net losses in their most recent financials, while the other half were profitable.
A: Net profit is not mandatory for listing, but stock exchange rules typically require operating profit or positive EBITDA in at least two of the three years before filing an application.
A: Early-stage investors believe they can have the greatest influence on product direction, team formation and unit economics during the pre-seed and seed phases, offering more than just capital through guidance and networks.
A: AI is viewed as transformative: it can automate tasks, create new business models and deliver affordable operational tools to millions of small businesses that previously could not access such systems.
| Feature | Details |
|---|---|
| IPO count | Nearly 80 mainboard IPOs, slightly up from 76 |
| Capital raised | INR 1,630 billion vs INR 619 billion previous year |
| IPO candidates tracked | 42 companies with mixed profitability (21 profitable, 21 loss-making) |
| Combined losses (loss-making group) | Over Rs 12,000 crore |
| Early-stage emphasis | Pre-seed and seed investments prioritized for hands-on impact |
| AI role | Enables new models and affordable systems for 63 million+ small businesses |
| Sector approach | Behavioral thesis, sector-agnostic, slight bias to consumer over enterprise |
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