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.
By Shivani Tiwari | Sep 12, 2025
A surge in initial public offerings is reshaping the outlook for startups and investors in India. A recent industry report shows nearly 80 mainboard IPOs, up from 76 the prior year, raising about INR 1,630 billion, a sharp rise from INR 619 billion the year before. Industry leaders say this increased access to public markets will change how venture capital flows into the ecosystem, even as many early-stage investors keep their focus on very young companies.
The size and pace of the IPO wave matter because they offer clearer exit paths for founders and returns for backers. Several market participants see IPOs becoming realistic milestones for more startups rather than distant goals. That shift can change fundraising terms, founders’ planning horizons, and the kinds of businesses investors choose to back.
Despite enthusiasm about public listings, some venture firms say they will continue to concentrate at the earliest stages. One general partner who invests in pre-seed and seed rounds argues that the firm can have the most impact when companies are still shaping their product and strategy. The firm looks for founders who design solutions that work with local realities and prefer business models that empower trusted local partners instead of cutting them out.
Artificial intelligence is no longer just a buzzword for these investors. They report AI is enabling new business models and practical tools that small businesses can afford. With more than 63 million small enterprises across India, there is a large market for workflow systems and affordable digital project managers. Investors are betting that AI can provide the missing operational muscle for small firms that previously could not access or pay for such systems.
The investor group described its investment thesis as behavioral rather than vertical, meaning it backs founders who understand how to work with an intermediary-led economy and who use AI to solve real-world problems. While the firm is sector-agnostic, it has a slight tilt toward consumer-facing businesses. Portfolio companies include startups in renewable energy, education, construction management, and logistics.
The firm is cautious about the crowded market for B2B AI SaaS products. Many investors see this category as a safer bet, which has led to a flood of similar startups chasing the same sales and distribution challenges. The investor argues the better opportunity lies in unlocking value for the massive base of small businesses across the country.
While public listings are expanding, not all firms lining up for IPOs are profitable. A tracker of 42 companies preparing IPO filings shows a split: half reported net losses in their most recent financials, while the other half were profitable. The combined losses of the loss-making set were estimated at more than Rs 12,000 crore, led by a few large players. Profits at some companies have also improved: a hospitality chain reported its net profit more than doubled in a recent quarter, and several financial and retail firms posted positive results and filed preliminary IPO papers.
Listing rules require evidence of operating profitability for at least some prior years, but it is not mandatory to show net profit for all firms. Many investors and advisors look beyond headline losses to operating metrics, unit economics, cash flow, and scalability. Some say startups often spend heavily on growth and customer acquisition, which can make profits look weak on paper despite solid unit-level economics.
Reporting by Jayshree P. Upadhyay in Mumbai and Nishit Navin in Bengaluru.
Editing by Vijay Kishore and Mrigank Dhaniwala.
A recent report recorded nearly 80 mainboard IPOs, which together raised about INR 1,630 billion, a large increase from the prior year’s INR 619 billion.
No. Among 42 companies tracked for planned listings, 21 reported net losses while 21 were profitable, showing mixed financial health across hopeful IPO candidates.
Not necessarily. Some early-stage investors say they will keep focusing on pre-seed and seed rounds where they can shape companies and add the most value beyond capital.
Investors report AI is enabling new business models and affordable tools for small businesses, making it a core part of their investment thesis when AI solves real operational problems.
Retail investors should look beyond net profit to unit economics, cash flow, scalability, and whether a company’s model fits well with local market realities.
| Topic | What it means | Numbers to know |
|---|---|---|
| IPO momentum | More startups reaching public markets, improving exit options | ~80 IPOs; INR 1,630 billion raised |
| Profitability mix | Half of IPO hopefuls report losses, half profits | 42 tracked companies; 21 loss-making |
| Early-stage investing | Investors still back pre-seed/seed for high impact | Focus remains on early rounds |
| AI impact | AI enabling new models and scalable tools for small businesses | Potential market: 63 million small businesses |
| Investor caution | Concerns about crowded B2B AI SaaS market | Preference for solutions that fit local realities |
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