India Tech Startups Worth $100 Billion Expected to Pursue IPOs by 2027

Over thirty tech startups in India, valued collectively at $100 billion, are anticipated to go public by 2027. This development signifies a potential revival in the Indian stock market, as highlighted by a leading advisory firm specializing in internet company deals.

Major Companies Planning IPOs

Notable firms such as Flipkart, a major online retailer under Walmart Inc., PhonePe, a payment solutions company, and Oyo Hotels, a lodging provider, are among the frontrunners looking to list on the Indian stock exchange.

Better Prepared Startups

In contrast to the turbulence seen in 2021 and 2022, where many startups faced declines post-IPO due to inflated valuations, these upcoming listings are backed by more robust financial health. According to Kashyap Chanchani, managing partner at The Rainmaker Group, around two-thirds of the startups planning to list are already profitable and have improved transparency.

Recent Market Trends

The number of IPOs in India saw a significant drop of 34% in the first quarter, reflecting a slowdown in the stock market. The benchmark NSE Nifty 50 Index, which had seen consistent growth, faced a downturn, impacting overall market sentiment. In this context, the anticipated influx of IPOs could serve as a much-needed boost.

Investment Landscape

Prominent investors, including SoftBank Group Corp. and Prosus NV, are looking towards these upcoming IPOs as potential exits for their investments. With many startups showing promising performance, there is cautious optimism about their market entries.

Challenges Ahead

Despite the excitement surrounding these IPOs, challenges remain. Investors are currently wary due to various economic factors and past performance issues with newly listed stocks. Companies will need to carefully consider their valuation to attract retail investors who may be hesitant to accept high price tags.

The Indian startup ecosystem remains one of the largest globally, following the US and China. However, it has also faced its share of corporate governance issues and market fluctuations, bringing a level of unpredictability. Both investors and startups must navigate these complexities as they move towards the IPO stage.

startups, IPO, India