Indian Startup IPO Market Slows in 2025 as Challenges Mount
The Indian startup IPO market has slowed down in 2025, with only five successful listings so far. Most debuts have been lacklustre, raising concerns about the stock market's health.
Analysts point to several factors behind the slowdown, including global volatility, foreign investor outflows, and regulatory changes. Startups face challenges like limited access to growth capital, bureaucratic hurdles, and structural issues such as rigid labor market rules and internal market barriers. Despite governmental efforts to ease regulations, these challenges persist.
The gap between private and public markets lies in the demand for profitability and long-term sustainability from retail investors. Secondary market performance has led investors to become more selective, pushing for lower valuations and causing promoters and early investors to wait longer for exits. However, the pipeline of IPOs remains strong, with issues worth over ₹2.6 lakh crore lined up and about ₹1.2 lakh crore already cleared by SEBI.
The slow IPO momentum may be forcing companies to strengthen their financial models and pricing strategies, leading to a healthier and more sustainable future for startups. More than 85 traditional companies filed DRHPs in the first half of 2025, but only about 24 mainboard IPOs hit the markets, down from 36 during the same period last year.
While the startup IPO momentum may not return to the same level as 2024, improved monsoon forecasts, GST rationalisation, and potential foreign capital inflows could bring fresh energy to the stock market in the coming months. The current pause may be an opportunity for startups to focus on fundamentals and long-term sustainability, rather than speculative exuberance.
