India's Startup Exit Landscape: IPOs and M&As on the Rise
Meanwhile, 41% of Indian investors showed a preference for secondary deals over traditional exits like IPOs and M&As, as revealed by an Inc42 survey, highlighting the maturing market and growing demand for liquidity. A survey conducted by Inc42 for the third quarter of 2025 revealed that 41% of Indian investors prefer secondary deals over other exit strategies such as IPOs, buyouts, and acquisitions.
Startup exits refer to the process of selling a company, a significant event in the lifecycle of startups that can take various forms, including initial public offerings (IPOs), mergers and acquisitions (M&As), and buyouts. The choice of exit strategy is influenced by multiple factors such as market conditions, timing, and the company's goals.
IPO Activity Gains Momentum
In 2025, the Indian startup ecosystem witnessed a notable increase in IPO activity, with 18 startups going public. Companies such as Groww and Urban Company were among the major players in this trend, highlighting the growing importance of IPOs as a central strategy for startup exits. The Securities and Exchange Board of India (SEBI) granted approval to companies like Shadowfax and Shiprocket, further indicating a robust pipeline of upcoming public offerings.
IPOs are a critical component of startup exit strategies, providing companies with access to capital markets and increased visibility. This year, significant liquidity is anticipated in the IPO cycle, reflecting the maturing market and investors' growing confidence in these ventures.
Mergers and Acquisitions as Exit Strategies
Mergers and acquisitions (M&As) continue to be a prevalent exit strategy, involving the sale of startups to other companies. These transactions require thorough due diligence, affecting not only the financial aspects of the deal but also employee retention and morale. Founders often remain involved in the company post-exit, ensuring a smooth transition and sustained growth.
The timing of M&As is crucial, as market conditions can significantly influence the success of these deals. Strategic planning from an early stage is essential for founders aiming for an effective and profitable exit.
The Role of Secondary Markets
Recent trends indicate a surge in secondary share transactions, which play a crucial role in providing liquidity for early investors. A survey conducted by Inc42 for the third quarter of 2025 revealed that 41% of Indian investors prefer secondary deals over other exit strategies such as IPOs, buyouts, and acquisitions.
The market for secondary funds in India is becoming more organized, with venture capital firms launching funds focused on secondary transactions. This development benefits investors by offering structured channels for exiting their investments. The increase in secondary funds reflects the maturing ecosystem, providing early investors with opportunities to exit while facilitating new investments.
Challenges and Opportunities in the Exit Landscape
Despite the growth in IPOs and M&As, challenges remain in the Indian startup exit landscape. Investors are increasingly inquiring about liquidity timelines, indicating a demand for predictable and transparent exit opportunities. The choice of exit strategy not only impacts the company's financial outcome but also its workforce and operational continuity.
As the market continues to mature, startups and investors alike must navigate these challenges with strategic foresight, leveraging the opportunities presented by both public offerings and secondary markets. With a significant liquidity influx expected in the coming years, the Indian startup ecosystem is poised for substantial growth and transformation.
"92% of investors see increased liquidity as a positive sign of market maturity," reflects the sentiment within the investor community, underscoring the growing confidence in India's startup landscape.