Tech startups worth $100 bn set to pursue IPOs by 2027: Rainmaker Group

More than 30 technology startups, collectively valued at $100 billion, are poised to go public by 2027, signalling a potential rebound in India’s stock market activity, according to a report by investment bank The Rainmaker Group.

 

Walmart-owned Flipkart, financial technology (fintech) leader PhonePe, SoftBank-backed Lenskart, Razorpay, Zetwerk, and Meesho are among the top companies preparing to go public in India.

 

The report indicates that these firms are in a stronger financial position than the 2021 and 2024 cohorts were a few years before their initial public offerings (IPOs). Many are experiencing rapid growth and achieving operating profitability ahead of their listings.

 

“The third wave for venture-backed IPOs, over the next two years, would be the largest and the most consequential,” said the report.  “The incoming cohort has demonstrated a healthy trade-off between growth and profitability – almost two-third of the cohort is already profitable two years before the IPO.”

 

It said a critical peer set of 38 venture capital-backed companies is already listed. Most companies on the verge of listing already have a listed peer set. 

 

Private companies are behaving like public companies well ahead of listing. They are putting out results and disclosures and building familiarity with relevant investors, the report said.

 

The report comes at a time when India’s startup ecosystem is experiencing a surge in IPOs, marking a shift from the practice of companies that preferred to list in Singapore or US.

 

New-age companies – typically driven by technology and focused on digital services – are expected to play a crucial role in India’s upcoming IPO boom. There are about 30 such listed companies with a combined market capitalisation (market cap) of more than $110 billion, of which the top 15 account for $80 billion, according to Redseer Strategy Consultants. 

 

The market cap of these new-age companies is expected to reach $1 trillion by 2030, driven by IPO-ready businesses, a robust regulatory environment, and domestic investments, according to the marketing consultancy firm.

 

“There were over 330 IPOs in 2024 in India, accounting for 31 per cent of global IPO volumes and raising about $20 billion, the most after the US. India is definitely coming of age,” said Ranvir Davda, co-head of investment banking firm HSBC India at an event recently. “We are dealing with short-term turbulence in the (market), but we believe in the long-term structural story of India. There is a $13 trillion market cap target for the country by 2030 and the new-age tech stocks are expected to be a fulcrum of that.”

 

The transformation has positioned India as a preferred destination for startups aiming to go public. Notable IPO successes include food and grocery deliverer Swiggy and Ola Electric, an electric vehicle manufacturer. 

 

Swiggy’s $1.35 billion IPO in November 2024 was the second biggest in 2024, next only to Hyundai Motor India’s $3.3 billion IPO in October 2024, and was oversubscribed more than fourfold. 

 

Ola Electric’s shares jumped 20 per cent on trading debut on August 9, 2024, bringing the company’s valuation to $4.8 billion. The $734 million IPO was one of the largest in India in 2024.