The Bull Case For Indian Startups

SUMMARY

There’s plenty of room for new startup IPOs in India and even global investment advisors are turning bullish about the balanced mix in India's 'investible universe'

This is the first edition of Inc42 Markets, a special Sunday newsletter that spotlights exclusive insights, deep analysis, and expert commentary on India’s startups and new-age tech stocks—tracking startups from pre-IPO trends to post-listing performance as they reshape public markets.

Why now? Read the first edition, and it should be amply clear


It’s the day after the Union Budget, but our eyes are firmly on the future. And the future for Indian startups is public — just this week, we reported on the IPO roadmap of Servify, Pine Labs, WeWork, Droom, OfBusiness, Lenskart and Curefoods!

Since 2015, the transformation of the Indian startup and tech ecosystem has been nothing short of extraordinary. In fact, India’s status as a global startup powerhouse is only growing. With over 1.5 Lakh  government-recognised startups, 119 unicorns and $158 Bn+ in startup funding, the stage is now set for a massive public markets run.

Already more than 30 startups have joined the new-age tech stocks cohort in the past three years, and this number is expected to double in the next 11 months as dozens of startups are lining up for IPOs. It’s this bull run on the bourses that has created the bull case for Indian tech today.

It’s not just us saying this.

As investment giant UBS put it in its January 2025 report: “The story goes beyond the immediate hype though, gathering strength from long-term themes such as global supply chain reconfiguration and a rising Indian middle class. Progressive structural reforms in many areas, such as improving export competitiveness, attracting foreign investments and creating a business-friendly environment through tax benefits, subsidies and other incentives, also provide the right setup for growth to continue in the long run.”

Among other advantages, India has technology adoption on its side. India’s big focus on STEM education at the primary level, and early adoption of technology such as 5G, AI and digital public infrastructure have only served to make this the hottest destination for foreign investors.

In fact, UBS goes a step further and says this about the Indian opportunity: “The investible universe has been broadening over the years, and the current balanced mix of companies big and small and from different sectors presents the right conditions for sustained alpha delivery. Although diverse, the market is still somewhat inefficient. Identifying mispriced stocks, especially undervalued ones, offers the potential of excess returns.”

Plus, there’s plenty of room for new listings given the current optimism in the market. Consider this: The world’s largest economy, the United States, has 773 listed tech companies with a combined market cap of $21 Tn, which accounts for 40% of the total market cap of all listed US companies. In contrast, listed tech companies in India account for just 2% of the total market cap — a clear signal of the untapped potential.

Kunal Bahl, cofounder of Snapdeal and listed B2B ecommerce company Unicommerce, believes there is a shift in the founder mindset too. Now they are looking for outcomes in the public markets rather than planning for an exit through acquisitions or mergers.

Bahl, for instance, foresees a massive 100X surge in public listings can be expected in the next few years as Indian founders are showing a different kind of intent, as seen by the headlines this week — see below.

“We are already seeing signs of this in the startup ecosystem, but I believe it is still very much the tip of the iceberg. 2,500 listed startups by 2030 sounds ambitious right now because we have only 30 or 40 listed startups, but remember, people didn’t think we’d even reach that number a few years ago,” he added.

The thumbs-up for India from global investment bankers is only going to add to the momentum. “Domestic capital inflows remain strong and are getting stronger. While foreign investment inflows have been sporadic, I think that was also expected. And the market today is held together, in large parts, by domestic institutions, which was not the case a couple of years ago,” Anuj Bhargava, partner at Lightspeed India, told Inc42.

Now, imagine when foreign investors recalibrate their India outlook and index more heavily on the momentum being seen on the ground today. “Taken together, we believe dedicated exposure to India could prove rewarding for global investors in the long run with the country on its path to become a global economic superpower,” UBS adds in its report.

Still need proof to make a bull case for Indian startups?

New-Age Tech Stock In Focus: Cartrade’s Super Week

Shares of CarTrade Tech reached their all-time high market value amid a four-day surge this past week, which followed the company’s stellar performance in the third quarter of FY25 (Q3 FY25).

CarTrade shares shot up by a massive 32% from its opening price on Monday, January 27, and eclipsed its previous peak as well as the broader automobile sector on the stock exchange. The automobile marketplace stock’s performance metrics indicate sustained momentum in the secondary market as investors chase the upside.

The upward surge was unsurprising, given CarTrade posted a consolidated net profit of INR 45.53 Cr in Q3 against a loss of INR 23.55 Cr in the year-ago quarter. This performance boost tracks with the share price. Over the past year, CarTrade has delivered an impressive 118.58% return, significantly outpacing the BSE Sensex, which recorded a 7.45% increase.

Other Top Gainers & Losers

Among the new-age tech stocks listed in India, ideaForge had a week to forget — more on this below  — while besides CarTrade, there were big gains for ixigo and Unicommerce this past week.

Brokerage Corner: “Near Term Pain For ideaForge” – JM Financial

As drone tech company ideaForge slipped into the red in Q3 — reporting a consolidated net loss of INR 24.02 Cr — several questions were raised about the company’s order books and drying revenue pipeline.

Even operating revenue crashed 81% to INR 17.61 Cr during the quarter under review. It’s no wonder then that investment banking firm JM Financial claimed that ideaForge’s lower order book should worry investors vis-a-vis near-term revenue visibility. The order book stands at INR 20.7 Cr, vs INR 1,800 Cr one year ago.

Future growth is highly dependent on the company locking in orders worth INR 4,000 Cr, where it is currently in the L1 stage. Another large order is expected to be finalised in the near term, according to ideaForge, which could well shore up the company’s bottom line in the next year.

Having said that, JM Financial advised investors to buy the stock anticipating a spike in the mid-to-long term with a target price of INR 540. Incidentally, on the Budget day, ideaForge saw a 3.15% gain in share price and closed at INR 480.05 apiece on the BSE.

Interview: Captain Fresh’s IPO Playbook

Inc42: Captain Fresh is going public when it’s already profitable. How do you see this growing in the next few years? 

Captain Fresh founder and CEO Utham Gowda: “The IPO is obviously the primary goal. We believe we can do an IPO because we have been profitable and we see clear levers of how this profit can nearly double in the next four to six years. We believe this is the right time to go to the public market because of the runway in terms of the prospects of profitability.”

Our full Q&A with the CEO of the IPO-bound company

Startup IPOs Watch

  • WeWork Files DRHP: The coworking major has gone to capital markets regulator SEBI with its draft papers for the IPO comprising an offer-for-sale of up to 4.3 Cr (43,753,952) equity shares
  • Droom Revs Up Listing Plans: Used car marketplace Droom is looking to file its DRHP for an INR 1,000 Cr IPO by June this year, with half of this expected to be a fresh issue
  • OfBusiness Makes Big Change: The B2B marketplace unicorn has converted itself into a public company ahead of its potential mega $1 Bn IPO later this year
  • Lenskart’s IPO Vision: Lenskart is finalising bankers for its much-awaited IPO, with Kotak Mahindra Bank and Morgan Stanley in talks with the eyewear giant
  • Servify Gunning For Gold: Mumbai-based Servify is close to finalising its IPO plans and has roped in bankers as it plans to raise $400 Mn to $500 Mn at a valuation of $1.5 Bn, sources told Inc42
  • Pine Labs Preps DRHP: The fintech major is gearing up to file its draft red herring prospectus for an initial public offering by the middle of next month, after it completes the redomiciling process from Singapore to India
  • Curefoods Eyes $400 Mn Listing: The Accel-backed cloud kitchen startup is likely to float its IPO in late 2025 or early 2026 and is looking to raise up to $400 Mn via the public offer
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