Why India’s mid-sized startups are choosing IPOs over the unicorn dream

₹300–400 crore and show predictable performance, they are increasingly turning to public markets to build brand credibility, attract talent, and provide shareholder exits.Startups including Scripbox, MyGate, FabHotels, and ClassPlus are in various stages of discussions to tap Dalal Street sooner than previous cycles would have suggested, at least four people familiar with the matter said. The shift is being driven by strong valuations, deep domestic liquidity, and founders’ desire to avoid waiting for another private round.“Public market’s current attraction plays a huge role in people’s decision to opt for a listing.

It definitely has secured a position as a top option for the next round fundraise for many early- to mid-stage startups,” said Mukul Rustagi, co-founder and chief executive officer (CEO), Classplus.While Rustagi did not comment on the potential size of the initial public offering (IPO), he said startups are considering diluting anywhere between 10-15% of their market capitalization through a public issue. ClassPlus is likely to finalize its listing plans after the close of the current financial year.According to one person cited above, these startups are likely to raise ₹400-600 crore through an initial public offering.“Many of the companies that are being approached today prefer the IPO route rather than growth capital as they are seeing some of their peers command rich valuations right now,” a second person said.An earlier IPO allows founders to dilute less, reset investor expectations, and reduce the pressure created by repeated private-market exit cycles.