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
A growing pipeline of companies preparing to list on the main stock board is prompting a shift in how venture capital is being considered in India. A global audit and advisory firm reports nearly 80 mainboard initial public offerings during the year, which raised about INR 1,630 billion, a steep rise from the prior year’s INR 619 billion. At the same time, a tracker of 42 startup candidates for public listing shows the group is evenly split between profitable and loss-making firms, underlining mixed financial readiness despite strong market activity.
The expanding public market window is changing investor expectations and founder incentives. One early-stage investor and general partner at a seed-focused fund says the IPO pipeline will alter the ecosystem by turning listings into realistic milestones for more companies, rather than distant ambitions. Despite tracking public exits closely, the fund retains a primary focus on pre-seed and seed-stage investing, arguing that the greatest value comes from shaping companies early through capital, networks and operational guidance.
The fund describes its investment thesis as behavioral, not vertical, meaning it looks for founders who design businesses that work with India’s intermediary-rich market dynamics rather than trying to remove intermediaries entirely. The firm prefers models that empower on-the-ground partners and build trust in a low-trust economy where people often choose to deal with known human contacts over faceless platforms. The firm also notes a slight preference for consumer-facing businesses but stresses sector agnosticism overall.
Artificial intelligence has been highlighted as transformative for early-stage strategies. AI is not only automating tasks but enabling new business models, the investor states, and it can act as a kind of project manager for India’s vast base of small businesses—numbered at over 63 million—that historically could not afford sophisticated workflow systems. The fund looks for founders who pair AI capabilities with real-world distribution and trust networks.
The fund’s portfolio spans sectors to illustrate its behavioral thesis, with investments in renewable energy, education, construction management and logistics among others. Portfolio names include companies focused on solar, workforce training, construction project coordination and shipment aggregation.
Analysts tracking firms targeting public offers point out that being loss-making is common at scale-ups, with much of the spend channeled into growth and customer acquisition that compresses reported profits. One venture debt manager notes that operating metrics and unit economics can be more meaningful gauges of listing readiness than net profit alone. Wealth and investment professionals add that scalability, positive cash flow prospects, working capital discipline, market position and proprietary advantages matter for investor appeal. Retail investor interest is expected to be strong despite profitability concerns, driven by appetite for high-growth opportunities.
The current cycle is prompting founders to sharpen unit economics and scalability narratives, while investors are balancing pre-IPO gains against long-term value creation. Early-stage backers argue that their leverage to influence product-market fit, distribution ties and governance is greatest at the seed stage—making that segment crucial even as IPO exits gain visibility.
Reporting contributions came from correspondents based in Mumbai and Bengaluru. Editing was carried out by senior editorial staff.
A: Nearly 80 mainboard IPOs were recorded, raising approximately INR 1,630 billion during the period covered.
A: No. Of a tracked group of 42 companies preparing for public listing, 21 reported net losses and 21 were profitable, showing a mixed picture on profitability.
A: Not strictly. Stock exchange norms require certain operating profit conditions for primary listing in some cases, but many companies rely on strong operating metrics and unit economics rather than net profit alone to make the case to investors.
A: Some investors see the pipeline as transformational and expect it to change exit expectations; however, many early-stage funds remain focused on pre-seed and seed investments where they can add strategic value.
A: AI is seen as a catalyst that enables new business models, improves operational efficiency and can provide affordable workflow and project management tools to millions of small businesses that previously could not access such systems.
| Feature | Detail | Notes |
|---|---|---|
| IPO count | Nearly 80 mainboard IPOs | Higher than the prior year’s count |
| Capital raised | INR 1,630 billion | More than double year-over-year |
| IPO-bound startups tracked | 42 firms | Split evenly: 21 profitable, 21 loss-making |
| Combined losses (loss-making cohort) | Over Rs 12,000 crore | Led by a few very large firms within the group |
| Venture focus | Pre-seed and seed-stage investing | Hands-on support, network and guidance prioritized |
| Strategic thesis | Behavioral, not vertical | Prefers models that work with intermediary networks and local trust dynamics |
| AI role | Enabler of new models and affordable workflows | Targeting improvements for ~63 million small businesses |
Reporting contributions from Mumbai and Bengaluru. Edited by senior editorial staff.
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