A significant trend is reshaping India's startup landscape. A growing number of mid-sized companies are now planning to enter public markets much earlier than before, moving away from the prolonged pursuit of high private valuations and unicorn status. This strategic pivot is driven by abundant domestic liquidity, a plateau in private funding, and a renewed focus on profitability and sustainable growth.
The Early Listing Wave: Who's Leading the Charge?
Several prominent startups are actively preparing for this shift. Companies including Scripbox, MyGate, FabHotels, and ClassPlus are in various stages of discussions to tap Dalal Street, according to at least four people familiar with the developments. This move is happening sooner than previous investment cycles would have typically suggested.
FabHotels, operating under parent entity Travelstack Tech Ltd, has already filed its draft red herring prospectus to raise ₹250 crore. ClassPlus is likely to finalize its listing plans after the close of the current financial year. Scripbox is working towards being IPO-ready within the next six to eight quarters.
"Public market's current attraction plays a huge role in people's decision to opt for a listing. It definitely has secured a position as a top option for the next round fundraise for many early- to mid-stage startups," said Mukul Rustagi, co-founder and CEO of ClassPlus. While not commenting on the potential IPO size, Rustagi indicated startups are considering diluting between 10-15% of their market capitalization through a public issue.
Drivers of the Shift: From Private Glory to Public Certainty
This trend marks a clear departure from the post-pandemic boom of 2021, when Indian startups aimed to stay private as long as possible to chase unicorn valuations. Today, the calculus has changed. Founders are choosing earlier listings to raise capital, dilute less equity, and reset exit expectations for early investors.
According to sources, these startups are likely to raise ₹400-600 crore through their initial public offerings. "Many of the companies that are being approached today prefer the IPO route rather than growth capital as they are seeing some of their peers command rich valuations right now," a person familiar with the matter said.
Prateek Indwar, Managing Director and Head of Capital Markets at InCred Capital, notes the shift is most pronounced in the mid-sized IPO segment (₹300-1,000 crore), with the ₹300-600 crore range showing notable activity. "Overall, mid-sized companies, including those in the ₹500-600 crore band, are materially more willing to access public markets today than they were in the mid-2010s or even in the pre-pandemic period," Indwar explained.
Blurring Lines and a Reset in Exit Strategies
The landscape for smaller public offerings has also evolved. The total fundraising on the SME platform rose 31% year-on-year to ₹11,539 crore in 2025. The quality of SME IPOs has improved, narrowing the gap with the smallest mainboard offerings. In 2025, the largest SME IPO was ₹166 crore, while the smallest mainboard IPO was ₹116 crore.
For growth-oriented startups, a mainboard listing is often advised for its quality investor base and market depth. Mainboard IPOs have performed strongly, with 103 companies raising a record ₹1.76 trillion in the past year. In 2024, 91 companies raised ₹1.6 trillion via mainboard IPOs.
Gunjan Shukla, Global Head of Strategic Finance at Prosus Group, emphasizes this is not just a funding story. "What we are seeing is a reset in how exits are sized. Indian public markets are deep enough at the mid-cap level and ₹600-700 crore IPOs may now be rational, not reactive, choices. Founders, rightly, may prioritize certainty, liquidity and governance over chasing peak private valuations," Shukla stated.
The shift is underpinned by several factors: strong domestic liquidity, improved corporate governance, a greater issuer focus on profitability, positive investor sentiment, and more deliberate exit planning. Typically, companies targeting IPOs in the ₹300–1,000 crore range would have raised a comparable private funding round of about $20–80 million. This private segment appears to have plateaued, with public markets emerging as a competitive alternative.
Cautious Optimism for a Structural Change
The durability of this trend will depend on whether domestic liquidity remains deep and valuations stay supportive as the IPO pipeline expands. Experts believe a structural change may be underway. "The shift is from staying private until very large to using public markets as one of several growth levers," Indwar said, as more EBITDA-positive, fast-growing companies become IPO-ready.
However, founders remain measured in their enthusiasm. "A gold rush is only a gold rush, until the gold's still there," cautioned ClassPlus's Mukul Rustagi. The move represents a maturation of India's startup ecosystem, where sustainable growth and predictable capital are increasingly valued over the aggressive burn and valuation hype of previous cycles.
