In India, the maturity of a company is traditionally measured by going public and engaging in Initial Public Offerings (IPO). According to market regulations, a company should be profitable at least for three years before filing for an IPO. However, IPO has remained a distant dream for many start-ups of India which are especially backed by venture capital to solve problems with the help of either technology or innovation. JustDial went public in 2013 by becoming the first company to adopt the safety net scheme proposed by SEBI for its retail investors. In addition to offering the safety net, it also offered a ten per cent to the retail investors on the issue price, breaking the historical trend of five per cent. 

An IPO Boom In India

With the passage of time, start-ups that generally used to operate at a loss and used to run due to VC backups are now showing maturity in solving the problem and freeing themselves the loss-making tag. In July, the IPO of Zomato created a buzz and this was followed by many other start-ups like Nykaa that delivers beauty products at the customers’ doorsteps with the help of courier services similar to YunExpress – Policybazaar, Tracxn, Mobikwik, Delhivery, Paytm and CarTrade. India has witnessed a huge IPO boom this year, indicating that the Indian start-ups have the potential to be accepted both by retail and institutional investors. The IPO also is an indication of the fact that a vibrant stock market was always present in India. Another trend that became visible for the Indian start-ups is that scalability plays a huge role in a tech component before the company starts making a profit. This, in turn, indicates the maturity of the tech companies and ecosystem too. 

Stronger Valuations and More Exits 

The IPO currently presents in India that early investors in a start-up are free from the burden of both acquisitions and mergers and acquisitions. Investors from all around the globe now have their eye on the Indian start-up ecosystem because the IPO presents a viable option for investors. The IPO of Zomato indicated that even though this unicorn was loss-making, there was a dearth of liquidity in it. 

Tech Is Important 

Zomato has proved that tech plays a vital role in the start-up and it is longer a niche vertical. It is now an accepted truth that tech involves almost everything in our life and this very fact has made it possible for Zomato which is a loss-making company to go public. Surprisingly, it is also believed that the embracement of the loss-making startups by the primary market did not take place overnight; it was decades in the making. The IPO boom which is currently seen is a result of the growth of tech start-ups that are in huge demand. 

Indian Regulatory Frameworks Are Helping The Start-Ups

Many small start-ups that simply require a courier company like ePacket to ship their products to the customers to the big ones are benefitting from the regulatory frameworks of India. The geopolitical factor in the IPO boom cannot be neglected. There has been a recalibration of the US-China relationship and as a result of it, the capital is being reallocated to other markets, including the Indian market. China is constantly changing its regulations and the investors are worried about it. On the other hand, the Indian regulatory framework is designed as such that it welcomes capital which is benefitting the investors, the founders and the public market side too.

Indian Start-Up Ecosystem Is At A Rich Period 

With so many unicorns in India and many in the making, India has successfully become the home to the third-largest unicorn owners. Even though the entire world was battling with COVID-19 and its impact on companies, the Indian start-ups not only showed immunity towards it but also grew and this is proven by the addition of 11 new unicorns this very year. The current scenario of India is proving to be a rich period for the Indian start-ups and the companies are well-utilizing the opportunities provided to it. The successful entry of Zomato into the capital market has started a chain process for other start-ups to follow the same start-up. It is expected that till the next year, approximately more than ten unicorns will launch their IPOs. India has successfully marked its position in the globe as the third-largest tech startup hub.