IPO Pipeline Set to Shift Venture Investing in India

IPO Pipeline Seen as Turning Point for Indian Venture Investing; Big Jump in Public Market Fund Raises

By Shivani Tiwari — Sep 12, 2025

Key takeaway: A growing pipeline of initial public offerings is changing how early-stage investors and startups plan exits and growth. Recent market data shows a sharp rise in capital raised through mainboard listings, even as many companies heading for public markets are still not consistently profitable.

What’s happening now

Industry leaders say the flow of companies moving toward public listings is reshaping the venture landscape. One general partner at an early-stage fund argues that a real IPO pipeline will turn what used to be distant exit dreams into realistic milestones for founders and investors. This view comes as a report found nearly 80 mainboard IPOs in the most recent year, a small increase from 76 the year before, and a major jump in money raised.

The total capital raised from those IPOs reached INR 1,630 billion, up sharply from INR 619 billion in the prior year. That surge is helping create clearer public exit routes for startups and is drawing more attention from retail and institutional buyers alike.

Early-stage focus remains

Despite the excitement about IPO momentum, the fund partner stresses that the firm’s core work stays concentrated on pre-seed and seed-stage companies. The team favors investing when founders are still shaping their ideas and where mentorship, networks and hands-on support can change outcomes most.

The fund’s investment thesis is driven by founder behavior and how well teams work with the country’s market realities, rather than by narrow sector bets. The firm prefers startups that build with existing on-the-ground partners in mind instead of trying to wipe out intermediaries, and it shows a small tilt toward consumer-facing businesses versus pure enterprise plays.

AI and small business opportunity

Artificial intelligence figures prominently in this approach. The fund sees AI not only as a tool to automate tasks but as an enabler of new business models, especially for the nation’s vast base of small businesses. With more than 63 million small businesses across the country, many lack affordable workflow and systems support. Investors note that AI can act as the project manager these small firms have long needed, improving efficiency and scaling practical tools to the low-trust, intermediary-led economy.

Examples of portfolio companies span several industries, reflecting the behavioral thesis: renewable energy, education, construction management and logistics. The fund remains cautious about the crowded B2B AI SaaS space, where many look for safety in similar product plays. The fund prefers solutions that unlock economic potential for local small businesses rather than chase generalized software niches.

Public market reality: mixed profitability

Tracking of firms preparing to list shows a split picture on profits. Of 42 companies that have either filed formal listing papers or are preparing to do so, half reported net losses in their most recent accounts while the other half reported profits. The combined losses of the loss-making group were estimated at more than Rs 12,000 crore, driven in large part by a handful of the largest private firms.

It is not mandatory to show a net profit to list. Stock exchange rules require operating profit in at least any two of the three years before an application for some listing paths, but many startups still fund growth and customer acquisition first. Observers say operating metrics and unit economics often give a clearer view of IPO readiness than net profit alone.

Signs of profitability among some players

Several established startups have shown profitability or improving results before going public. Examples include firms that reported profits or grew revenue significantly in recent periods, while others have filed preliminary paperwork to raise fresh capital from the public market.

Why this matters

The twin trends of stronger public markets and continuing early-stage support reshape incentives across the startup ecosystem. Founders can map exits with more confidence, which may affect hiring, burn rates and fundraising terms. For investors, a clearer IPO path can justify earlier bets and more patient capital, while also raising scrutiny of unit economics and path-to-profit for later-stage names.

Reporting and editing

Reporting contributions came from journalists based in Mumbai and Bengaluru. Editing was handled by two editors on the piece.