India’s start-up IPO surge continues as Lenskart, Groww debut amid valuation concerns

India's start-up IPO surge continues as Lenskart, Groww debut amid valuation concerns

India's frenetic start-up listing spree shows no signs of abating, with three unicorns-companies valued at over $1 billion-making their stock market debuts this week alone. Eyewear giant Lenskart, backed by a high-profile Shark Tank India judge, saw its $821 million share sale oversubscribed within hours on Monday, despite a volatile first-day trading performance. Meanwhile, retail brokerage Groww, which counts Microsoft CEO Satya Nadella among its investors, listed on Wednesday after its offering attracted 17 times more demand than available shares. Fintech firm Pine Labs is set to follow later this week.

These listings extend a record-breaking year for Indian start-up IPOs, which have already surged to 43 offerings in 2025-five times the number in 2020 and double 2023's tally, according to market intelligence firm Tracxn. The rush includes diverse players, from home-services platform Urban Company to ed-tech unicorn Physics Wallah, a YouTube-turned-classroom success story. Yet the boom has also reignited debates over sky-high valuations for often-unprofitable ventures, even as analysts hail a maturing ecosystem after years of funding droughts.

Early investors cash out as retail demand soars

For venture capitalists (VCs) who weathered India's "funding winter"-a period when early-stage capital dried up-the IPO wave offers long-awaited exit opportunities. Anil Joshi of Unicorn Ventures, which has backed around 100 start-ups, called the trend "encouraging times" after years of struggling to liquidate investments. Shailendra Singh, managing director at PeakXV Partners (formerly Sequoia India), attributed the robust demand to regulatory improvements and a broader investor base, including retail participants, mutual funds, and insurers.

"Historically, there was no appetite for high-growth companies," Singh told the BBC. "Now, with more market participants, a more diverse set of companies are hitting the market." The influx of capital has fueled a fivefold increase in start-up IPOs since 2020, per Tracxn data. However, critics warn that while early backers profit from exits, new investors-particularly small shareholders-face slim chances of post-IPO gains.

"Founders must be sensible when pricing shares; they owe a duty to protect small investors' money."

Shailendra Singh, PeakXV Partners

Profitability over growth: A shift in start-up strategy

The current wave contrasts sharply with past boom-and-bust cycles, marked by a new emphasis on profitability and governance. Anand Daniel, a partner at VC firm Accel, noted that today's listings feature "strong businesses with clear fundamentals," while weaker players reassess their models. Neha Singh, co-founder of Tracxn, highlighted a dramatic decline in start-up failures: only 724 shut down in 2025, an 81% drop from 2024's 3,900 closures-a figure itself lower than earlier in the decade.

"The sector is transitioning from rapid growth to strategic sustainability," Singh said, pointing to founders prioritizing "disciplined capital use" over aggressive expansion. This shift is reflected in funding trends: while India's tech start-ups raised $9.8 billion in 2025-far below the $40 billion peak in 2021-deal quality has improved, according to Accel's Daniel. "We've moved from exuberance to thoughtful capital deployment," he said.

Policy tailwinds and cautious optimism for 2026

Recent government measures, such as the abolition of the angel tax, have bolstered investor confidence. Yet questions linger about the durability of the IPO momentum. Singh of PeakXV Partners cautioned that "capital markets are inherently cyclical," making predictions for 2026 uncertain. For now, however, private investors are capitalizing on public market enthusiasm, offloading stakes in start-ups they backed years earlier.

While the funding landscape remains below pandemic-era highs, the focus on profitability, governance, and sustainability signals a more resilient ecosystem. "The market has become more discerning," Daniel said. "That's ultimately good for founders building for the long term."

Key figures at a glance

• 43 start-up IPOs in 2025 (vs. 8 in 2020, 22 in 2023).
• $821M: Lenskart's oversubscribed share sale.
• 17x: Demand multiple for Groww's IPO.
• 724 start-up shutdowns in 2025 (down 81% from 2024).
• $9.8B: Total tech start-up funding in 2025 (vs. $40B in 2021).