In this blog, we’ll delve into some of the most prominent top startup IPOs that have made headlines!
Until a few years ago, seeing a startup go public in India was a rare event, something that happened only after a decade or more of proven success.
IPOs were mostly reserved for legacy businesses or large, established players. For startups, especially those in the tech and consumer space, entering the stock market seemed like a distant dream.
But times have changed!
India’s startup ecosystem has matured rapidly, and with strong investor interest and bold business models, more and more startups are now tapping into the public markets.
A new wave of startup IPOs is reshaping the Indian stock market and giving retail investors a chance to own a piece of these next-gen companies.
What is a Startup IPO?
A Startup IPO (Initial Public Offering) is the process through which a privately held startup company makes its shares available to the public for the first time by getting listed on a stock exchange.
This is often seen as a major milestone in a startup’s journey, signaling its transition from a privately funded venture to a publicly traded company.
In India, when startups go public, they raise capital from public investors in exchange for equity. This funding helps them expand operations, pay off debts, invest in new projects, or simply provide an exit opportunity for early investors and founders.
There are different types of startup IPOs, such as:
- Mainboard IPOs: For well-established startups with larger revenues.
- SME IPOs: Designed for small and medium-sized enterprises.
What is a Draft Red Herring Prospectus (DRHP)?
DRHP stands for Draft Red Herring Prospectus. It is a preliminary registration document submitted by a company to the Securities and Exchange Board of India (SEBI) when it plans to raise funds through an Initial Public Offering (IPO).
The DRHP provides detailed information about the company’s business model, financials, market risks, promoters, objectives of the IPO, and how the funds will be used.
However, it does not include the IPO price or the number of shares being offered, which are added in the final prospectus.
Once SEBI reviews the DRHP and gives its observations, the company can file the Red Herring Prospectus (RHP); the final document that includes IPO pricing and other details for public investors.
List of Top Startup IPOs in India
Paytm
Paytm, founded in 2010 by Vijay Shekhar Sharma under One97 Communications, has grown into one of India’s leading digital payments and financial services platforms.
Headquartered in Noida, Paytm began by offering mobile recharges and bill payments but quickly evolved to include money transfers, ticket bookings, wealth management, microcredit, and “Buy Now, Pay Later” options. Its diverse offerings have made it a one-stop solution for both consumers and merchants across India.
IPO Details and Objectives
Paytm went public with one of India’s largest IPOs, filing a Draft Red Herring Prospectus (DRHP) with SEBI for an issue size of INR 16,600 crores (approx. USD 2.2 billion). This included a fresh issue of INR 8,300 crore and an Offer for Sale (OFS) of an equal amount.
The objectives of the IPO include:
- Strengthening Paytm’s ecosystem by acquiring and retaining more customers through technology and financial service access.
- Funding new business initiatives and expansion into strategic partnerships, mergers, and acquisitions.
- Meeting general corporate requirements.
Swiggy
Founded in August 2014 by Sriharsha Majety, Nandan Reddy, and Rahul Jaimini, Swiggy began as an online food delivery startup and has since grown into one of India’s leading on-demand delivery platforms.
Originally registered as Bundl Technologies Pvt Ltd, the company rebranded to Swiggy and diversified its services to include groceries, quick commerce, and pick-up and drop services.
IPO Details and Objectives
Swiggy’s book-built IPO, valued at approximately INR 11,327.43 crore, includes a fresh issue of 11.54 crore shares, amounting to INR 4,499 crore, and an Offer for Sale (OFS) of 17.51 crore shares, totaling INR 6,828.43 crore. The IPO price band was set between INR 371 and INR 390 per share.
Top financial institutions like Kotak Mahindra Capital, Citigroup Global Markets, Jefferies India, Avendus Capital, J.P. Morgan India, BofA Securities India, and ICICI Securities acted as the lead managers, while Link Intime India Private Ltd was appointed as the registrar for the issue.
The objectives of the IPO include:
- A part of the proceeds will go toward repaying or prepaying borrowings, especially those related to Scootsy.
- Significant investment will be made to scale up Swiggy’s Dark Store network, enabling faster deliveries.
- Funds will be used to strengthen technology and cloud infrastructure.
- Swiggy plans to invest in brand awareness campaigns to expand its presence across different user segments.
- Remaining proceeds will support other strategic initiatives and operational needs.
Honasa Consumer Limited
Founded in 2016 by Varun Alagh and Ghazal Alagh, Honasa Consumer Limited is the parent company behind some of India’s most well-known digital-first beauty and personal care brands, most notably Mamaearth.
With a strong emphasis on natural and toxin-free beauty solutions, the company has established a space in the D2C personal care space. As of FY 2023, it stands as India’s largest digital-first beauty and personal care (BPC) company in terms of revenue.
The company’s flagship brand, Mamaearth, has gained massive consumer trust for its non-toxic formulations and eco-conscious branding. Honasa’s portfolio also features brands like The Derma Co., Aqualogica, Ayuga, BBlunt, and Dr. Sheth’s, each designed for specific segments within skincare, haircare, cosmetics, and baby care.
IPO Details and Objectives
Honasa Consumer Limited launched its IPO with a price band of INR 308 to INR 324 per share, consisting of a fresh issue along with an Offer for Sale (OFS). For retail investors, the lot size was set at 46 shares, requiring a minimum investment of INR 14,904.
The objectives of the IPO include:
- A key portion of the proceeds is allocated toward advertising and promotional expenses to further increase visibility for their growing portfolio.
- The company plans to use funds for setting up new Exclusive Brand Outlets (EBOs).
- Investment will also support BBlunt, one of its subsidiaries, in establishing new salons across major Indian cities.
- The IPO proceeds will be partially used for unidentified inorganic growth opportunities.
- Remaining funds will be used to support the company’s broader operational needs.
Zomato
Zomato was founded in 2008 by Deepinder Goyal and Pankaj Chaddah, originally launched as Foodiebay, a platform offering restaurant menus and user reviews.Over the years, it evolved into one of India’s leading food tech companies, rebranded as Zomato, and expanded into food delivery, table reservations, cloud kitchens, and more.
IPO Details and Objectives
The Zomato IPO was launched as a book-built issue of INR 9,375 crore, comprising a fresh issue of INR 9,000 crore and an offer for sale worth INR 375 crore. The IPO bidding window for Zomato was open from July 14 to July 16, 2021, and the shares were listed on the BSE and NSE on July 23, 2021. The IPO was priced at INR 76 per share, with a minimum lot size of 195 shares, requiring a retail investment of approximately INR 14,040 (INR 14,820 at cutoff price).
The objectives of the IPO include:
- A significant portion of the proceeds will be allocated toward scaling up Zomato’s delivery and app infrastructure.
- Zomato aims to pursue strategic acquisitions and investments in complementary businesses.
- Funds are also intended for aggressive user acquisition strategies, marketing, and loyalty programs.
- Up to 25% of net proceeds are reserved for routine business operations.
Afterword
As India’s startup landscape continues to evolve, IPOs are no longer a far-off milestone; they’re a real and rising trend. These public listings not only reflect investor confidence but also mark a shift in how we view value creation in the digital economy. With more startups preparing to go public, the IPO wave is just getting started!