A top Indian advisory firm for internet businesses estimates that more than three dozen technology startups with a combined valuation of $100 billion are set to go public by 2027, which could indicate a revival of the country's stock market. Prominent firms that are set to list include Flipkart, the Walmart Inc.-owned online retailer, payment firm PhonePe, and hotel provider Oyo Hotels. Although India's IPO market has slowed in recent times, last year it was the second-largest market for share sales worldwide. According to The Rainmaker Group report, most startups gearing up for initial public offerings (IPOs) have managed to strike a balance between fast growth and profitability.

Rainmaker managing partner Kashyap Chanchani pointed out that the finances of these potential companies are much healthier than those that tried to raise money in 2021 and 2022, when many startups dipped sharply after listing because of overvaluation. For example, payment platform Paytm's stock has fallen by around 63% since its IPO, while beauty store Nykaa has fallen by 4%. Chanchani pointed out that two thirds of the companies intending to list are already profitable and are showing enhanced transparency. Rainmaker has advised clients such as Oyo and online platform Swiggy, though not in IPO advisory.

During the first quarter, Indian share sales decreased by 34% as the equity market suffered, with the benchmark NSE Nifty 50 Index falling after nine consecutive years of expansion. IPO proceeds, block sales, and share placements almost halved to $7.1 billion, lagging behind Hong Kong and Japan.

Although there is currently a downturn, Chanchani and other bankers remain hopeful that deal-making would return in the next few months with several major sales lined up, such as LG Electronics' Indian subsidiary, which may raise up to $1.7 billion, and electric scooter maker Ather Energy, looking to raise about $400 million.

A resurgence in startup initial public offerings would be a key exit avenue for large investors such as SoftBank Group Corp. and Prosus NV.

SoftBank's Vision Fund holds interests in firms such as Oyo, Lenskart Solutions, and CARS24 Solutions, and Prosus has interests in Meesho and Urban Company. Chanchani said these companies have significant stakes in many firms and are increasingly turning to the public markets, but warned that IPO pricing needs to be handled with care to not repel retail investors. Firms that are going public will have to contend with investor worries about a slowing economy and earnings growth. Some newly listed shares have also fallen after sales curbs were removed, putting pressure on a stock market that has already lost hundreds of billions of dollars since late last year.

India's startup space continues to be one of the biggest in the world, after the US and China. Yet, it has also seen its share of huge corporate governance scandals, falling valuations, and loss of profits. Several startups have been forced to scale back and rework growth plans, while others have collapsed. The example of Byju Raveendran's online education firm is a reminder of how a promising venture can collapse as investor sentiment turns against it.