The IPO fuel for India’s startup resurgence


Karthik Reddy

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Karthik Reddy

1 reads

After a year spent avoiding public markets even as private capital was in short supply, a slew of Indian startups are set to go public. This doesn’t just signal a change in thinking but heralds the dawn of a new era for Indian tech companies.

January 02, 2024


Key Takeaways

  • With the public listings of Indian startups finding their collective equilibrium last year, more companies are lining up to tap the public markets
  • It isn’t about the sheer size of the companies. There’s an appetite for profitable or path-to-profitable companies among public market investors
  • Private investors, too, would do well to look for long-term value drivers and strong moats rather than simply chasing fads
  • While the rah-rah days aren’t back yet, there is a fine balance and equilibrium to be achieved in 2024

For a decade, the venture capital-funded world of startups shied away from the public market glare. Instead, startups chose to embrace the Silicon Valley model of staying private for much longer than they should. Funding headlines offered a false sense of achievement as they continued on a perilous path.

Beyond the excesses of 2021, startups were clearly going to run into a brick wall—the failed WeWork IPO in 2019 was a leading indicator, which took temporary umbrage with the onset of the pandemic. The idea that public markets would reconcile to private market valuations has come, gone, and now been corrected. The euphoria of the handful of initial public offerings (IPO) in 2021 had long since subsided by 2023, but these newly minted tech IPOs finally found their collective equilibrium last year. Not surprisingly, the US market, which has a much deeper public presence for tech startups, corrected and normalised much more abruptly.

All of this is the best news and marks the dawn of a new era for Indian tech startups. In a market starved of cash-generating technology companies in the public domain—unlike the US and China—it’s time to hunker down and build these powerhouse mega tech companies. Reassuringly, the first signs are now visible.

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