India startup IPOs: on a knife-edge

India’s IPO market soared in 2024, with 13 startup IPOs raising over 290 billion rupees (US$3.4 billion). These included food delivery platform Swiggy, electric vehicle manufacturer Ola Electric, and online retailer FirstCry.

When 2025 kicked off, the general opinion among investment bankers was that the good times would roll throughout the year. Some even expected equity fundraising to top US$23 billion, 17% higher than in 2024.

Fintech companies like Pine Labs and Groww aim to raise US$1 billion each by going public while achieving valuations of up to US$8 billion.

However, there are now signs that the tide may be turning. India’s NIFTY 5oo, an index that tracks the performance of the top 500 listed companies on the National Stock Exchange, has declined by around 15% since its September 2024 high.

With the bull run slowing down, stocks of major companies that debuted in 2024 are also trading below their offer price. Firms targeting IPO this year – especially those still burning cash – may find themselves riding the wave at exactly the wrong time and risk crashing into the rocks instead.

Turning point?

The past may not predict the future, but it can explain why analysts were optimistic about 2025.

Sufianti, an equity strategist at Bloomberg Intelligence, told Tech in Asia in December 2024 that India could be a “stand out” market in 2025. She added that the country saw a “record high” number of 2024 IPOs.

Similarly, Roshan Raj, partner at Redseer Strategy Consultants, thinks the IPO momentum of India “should persist, driven by numerous IPO-ready companies and favorable market conditions.”

However, the recent performance of some tech companies that listed in 2024 has called into question whether the Indian market is at a turning point with more downside risks ahead.

Take Swiggy, for instance. Its net loss surged 39% despite a 31% revenue jump in the most recent quarter, the results of which were released earlier this month.

Analysts note that “network expansion and competitive intensity” were hurting the company’s margins, with this “period of hyper-competition” expected to last for a few more quarters.

IPO hopefuls

Domestic investors to the rescue?