September 2025 | Athera's Odyssey | The Indian Tech IPO Journey

Odyssey readers,

Three months ago, we brought you our first issue of Getting Meta. Instead of looking at specific sectors, we took a step back to look at the VC industry itself. This month, we’re doing something similar. The last few years have seen several landmark IPOs, especially of consumer tech companies like Zomato, Nykaa, and PayTm. Just last month, Urban Company’s IPO was oversubscribed 103 times, and its shares shot up on public listing.

So, it felt like a good moment to look at the history of tech IPOs in India, understanding the journeys that companies undergo en-route to public markets, what investors look out for, and where the next wave is coming from. To understand this, we spoke to

• Parag Dhol, who spoke about how investors approach portfolio growth
• Krishnakumar Natarajan, who talked about growing and listing an IT Services company in the 2000s
• Alok Bansal, who shed light on PolicyBazaar’s journey from a startup to a public company

You can read the entire issue below, or access a specific piece through the links above.

A Seasoned VC’s Perspective

The impact of Infosys

Parag Dhol joined TDICI, India’s first venture capital firm, in 1993 - the year Infosys went public. Now a General Partner at Athera VP, he still vividly recounts the impact that tech IPOs (initial public offerings) have had.

“What Infosys did to the stock market is immeasurable. It demonstrated to the Indian middle class that an honest man, with no family wealth, like Narayan Murthy could succeed,” he recalled. “Until then, Indian businesses were viewed with scepticism. Infosys was transparent about projections and costs; their accounting was conservative.”

The IPO also gave a fillip to entrepreneur ambitions, broadening possibilities and scale, but Dhol’s conversations with portfolio companies didn’t immediately change.

“TDICI, and, consequently, the venture business in India, was just five years old, quite immature,” he explained. “We didn’t understand the process of getting to an IPO or necessarily set that as a target for our investee companies.”

Even today, he noted, you can’t set concrete goals. “At Athera, we didn’t know, apriori, that of the 21 companies in Fund I & II, that PolicyBazaar would list or redBus would see a huge buyout. Most failed, some were acquired, others went the private equity route.”

Instead, he now models on aggregates: 10-15% of companies might IPO, 30%-40% will shut down, the rest will offer M&A/secondary exits along the way.

Getting IPO ready

In three decades, Dhol’s IPO-readiness benchmarks have remained consistent.

“Thumb rules don’t change, just the amounts,” he noted. “Revenue is key – ₹40-₹50 crore was reasonable earlier. When Geometric Limited, a TDICI investment, listed in 2000, it generated revenues of ~₹60-₹70 crores. Strong growth matters; 10%-20% isn’t enough.”

Differentiation is also important. “Geometric, though largely a software services firm, was sharply focussed on computer-aided design and manufacturing (CAD/CAM) vendors and earned 9-10% from tools they sold to such CAD/CAM vendors. They scaled well, and were effectively run.”

By the time of PolicyBazaar’s IPO in 2021, revenue requirements reached ₹500 crore, but growth, predictability, governance, and a unique business model remained critical. Profitability, briefly, wasn’t a prerequisite.

“PolicyBazaar, PayTM and Zomato were deeply unprofitable when they listed,” Dhol explained. “Now, that doesn’t work. You need to at least be heading towards profitability, though benchmarks differ across sectors. IT services companies competed with Infosys’ 25% profitability; that’s why Satyam’s shares always had a significant discount. PolicyBazaar and Zomato hover around 2%-3% profitability. But Swiggy, still unprofitable, is valued lower than Zomato despite a similar business model.”

Private vs public valuations

Though going public demands predictability, valuations may be more sentiment-based than in private markets.

“Here, you’re subject to both the wisdom and madness of crowds,” Dhol stated. “In 2000, internet companies were highly inflated; in 2008 banking was. Today, if Nvidia has a bad quarter, the entire US market will likely suffer.”

Equally, crowds can enforce accountability that private investors might not.

“Zomato, PolicyBazaar, PayTM – their stock prices suffered because they were unprofitable,” Dhol continued. “They had to respond to market feedback and turn things around. Private firms don’t adjust as fast because they’re only revalued during funding cycles.”

Private markets also let individual investors foment undue hype, he observed. And if a big investor creates hype, smaller ones inevitably follow.

“Softbank pumped money into WeWork because they thought it was a revolution. India saw the same with Byju’s and Unacademy. No public market would give Oyo money at $20 billion, though private players did. PayTM got away with a $20 billion IPO valuation, but fell drastically right after its IPO. So you do see breaks with sanity in private markets.”

The VC’s role

Venture capitalists like Dhol walk a tightrope with valuations. Higher portfolio valuations raise intermediate return metrics, but inflated ones can collapse under unrealistic expectations.

“As investors, we need to ensure founders don’t get carried away,” Dhol said. “If you raise money at very high valuations, you don’t have a choice but to try and grow into it. That, in the best case, takes time.”

Focussing on fundamentals is key to balancing conflicting incentives.

“If we invest in sensible business models with solid unit economics, it’s fine. Investing on a model subject to obsolescence is obviously risky, and it’s happened to us. I didn’t think Vizury would collapse after raising money at a $80 million+ valuation, but it did!.”

This expectation-setting often extends to larger ambitions for the company.

“Founders might have romantic ideas of IPOing, but not every business has enough meat to go public,” Dhol clarified. “It’s just like how some businesses just can’t produce the extraordinary returns that VCs expect. Around the 3-year mark I revisit goals with my entrepreneurs. If we’re ahead of where we’d planned, great (and rare!). If we are way behind, we need to pave the way for difficult conversations around year 4 or 5.”

“IPOs seem sexy and are bucket list items,” he continued. “Selling your company is bucket list minus one. But there’s quarterly pressure and the demand for predictability from the markets. Ask the PolicyBazaar team what they faced when its shares fell below the ₹980 issue price. Sure, Jeff Bezos might rubbish quarterly predictions and run Amazon with a 25-year outlook, but how many Founders can do that, realistically?”

For investors, then, prudence matters too. After all, Dhol reasons, if only 10%-15% of their portfolio will IPO, why nudge others, unnecessarily, in that direction? And, as Athera’s successful redBus and Sokrati exits showed, IPOs aren’t the only ways VCs generate outsized returns.

What’s next for India’s IPO market

The likes of Zomato, Nykaa and Urban Company showed that consumer-tech companies, largely serving India’s richest 10%, could make it big.

“There’s a big difference in today’s listing versus 20 years ago,” Dhol noted. “The average Indian never used anything produced by Infosys, but they’re now ordering food from Zomato/Swiggy, buying eyewear on LensKart, and using Mamaearth instead of HUL. It’s helped start-ups go mainstream; SharkTank is proof, even though I’ve never seen a full episode of it.”

But he’s less optimistic about consumer-facing companies targeting the masses.

“I can’t see strong successes in the Bharat segment,” he admitted. “Maybe Meesho, or content companies like Kuku FM, are exceptions.”

“The brutal reality is that a significant majority of India is quite poor,” he continued. “Companies making discretionary goods, which is who we generally target, aren’t making profits from someone like our drivers. Until purchasing power spreads to the bottom 90%, we aren’t going to catch up with China -in terms of profiting on mass domestic demand-, let alone the US. But, because 10% of India is still huge, domestic companies have room to scale.”

If not Bharat, what’s next? SaaS hasn’t lived up to the promise on the IPO front yet, but Dhol feels DeepTech might.

“It’s a foggy path,” he acknowledges, “without any $1B valued firms earning $200 million+ in revenue, but the timing is right. Underlying hardware like chips, GPUs, sensors, and communication tech are getting cheaper, enabling companies like Cynlr, Ati Motors, or Pixxel. The ecosystem’s maturing, so you see VCs like Speciale Invest focus exclusively here.”

“There’s also obvious potential for AI software companies. India’s software advantage can create deep vertical solutions, but the jury’s still out on that,” he concluded.

Looking Back at the IT Services Era

Switching from Executive to Entrepreneur

When Krishnakumar Natarajan, now Managing Partner at Mela Ventures, co-founded Mindtree in 1999, India’s IT services sector had gone mainstream. Though Infosys’ 1993 IPO was undersubscribed – hard to reconcile with the behemoth it became – the Y2K scare turbocharged demand for Indian tech talent. Companies like Cognizant, HCL, TCS and Wipro grew 100% year-on-year and posted impressive profits, all while setting high standards for corporate governance and transparency.

“High growth plus profitability attracted public markets,” Natarajan recalls, “and by the late ‘90s, offshore delivery from India was common. The top firms offered cheap and high-quality IT services by leveraging India’s talent pool – it was a powerful proposition that got brand India recognised by Fortune 100 and then Fortune 500 companies.”

In this competitive space, a new entrant like Mindtree needed to distinguish itself.

“I had an insight while running Wipro’s ecommerce and financial solutions business,” Natarajan remarked. “Large companies struggled to leverage the internet for their Customer facing (own applications). That became our entry – we helped build large, transaction-intensive internet applications.”

This meant that Mindtree wasn’t competing with Infosys on legacy outsourcing, but with US startups like Sapient. “Most of them didn’t survive the dot-com bust, but our model—delivering quality work at affordable prices—stuck.”

One of Mindtree’s first clients was Avis car rentals. At the time, bookings went through call centres, costing $2.70 per reservation and leading to long wait times. “There’s this hack called the Golden Hour—you’ll never get a CIO’s formal appointment, but call at 7 a.m. before the admin gets in the office and they’ll answer your call,” Natarajan smiled. That cold call landed Avis as a client. “We built their online reservation system, and 25 years later, they’re still using it.”

Unlike most Indian firms, Mindtree had American co-founders selling directly to US clients. Natarajan himself moved there for two years, hitting the streets to land the first customers. “Even now, I tell my founders – there’s no substitute for being there yourself,” he said. “You can raise $10 million and hire a sales team, but especially in a new geography, the founder has to get the first five customers.”

The roadmap for growth

From the outset, the founding team aligned on values, vision, and goals. “We wanted to hit ~$100 million revenue in five years, but to make it memorable we targeted $123 million; we wanted to say it was as easy as 1-2-3,” he laughed.

Mindtree was one of the first Indian IT service companies to raise venture capital, bringing in Palo Alto–based Walden International. “We agreed that once we hit $100 million in revenue, we’d list and give them an exit,” he said.

The existence of strong incumbents like Infosys, Wipro and HCL helped rather than hindered. “Because they’d set such high standards for governance and proved that IT service businesses worked, investors trusted the sector,” Natarajan explained.

“Convincing early clients was obviously hard. Even my best Wipro customers wouldn’t give me business. That was a humbling lesson—you think you brought the work, but it was really the brand.”

Despite an impressive first year that reaped $9.5 million in revenue, the dot-com bust took a toll.

“Growth stalled, and investors pushed for layoffs. We resisted. Instead, everyone took pay cuts—70-80% at senior levels,” Natarajan recalled. “We trusted the market to return, but de-risked geographically by expanding into Europe with clients like Volvo and Unilever. Early on, North America accounted for almost all business, but by IPO Europe was about 15%.”

They also diversified services, adding product engineering alongside internet applications. Eventually, momentum returned. “In 2005, we saw we’d cross $100 million and within 12–18 months started preparing to list.”

Taking Mindtree Public

Eight years into its journey, Mindtree launched its IPO in 2007. Valuation benchmarks were already set by Infosys and Wipro. “We couldn’t charge their premium, but the business was doing well. We were also okay leaving money on the table at that moment; we wanted to build an asset that created wealth for early supporters.”

Shares were priced at ₹425 and the IPO was oversubscribed 108 times – a far cry from Infosys’ experience a decade earlier. “We could sense the demand in our roadshows across Hong Kong, Singapore, New York, Boston, San Francisco,” Natarajan explained. “People saw how companies like Infosys had created wealth – we partly had them to thank. We also travelled across 25 class B and C cities in India, because we wanted retail investors involved.”

On Mindtree’s listing day, the share opened around INR 660, a ~40% premium, and closed even higher. That night, aboard a flight to London for a client meeting. Natarajan slept easy. “It was satisfying, no doubt, but we were all aware this was just one step in a longer journey.”

That journey had its share of ups and downs, obviously.

Just a year later, the global financial crisis hit revenues hard. Mindtree’s CAGR (cumulative annual growth rate) fell from 65% to single digits. Hasty to accelerate growth, the company made mistakes, one of which was an ill-fated attempt to build Android phones for the US market.

“It looked great on a spreadsheet,” Natarajan smiled, “but didn’t work in reality. Service providers pushed the risk of inventories to us, commissions for salesmen were high, and competition undercut us.”

“We had to write off $15 million and markets punished us - but we were upfront with investors. We told them we’d made a mistake and presented a 12-month correction plan. We also had senior team members leave. But it encouraged us to go back to basics, allowed other people to grow internally, and within two years, we’d become CNBC’s ‘Most Promising Company of the Year.”

His lesson from this?

“You need to take risks, otherwise the company won’t grow. And I disagree with people who say you can’t innovate once you go public because of quarterly scrutiny. But you need to build credibility and deliver. You can take calculated risks and if you don’t bet the company and own up to market with plans to fix things if plans do not work, you will be OK”

From the other side of the cap table

After a storied career as an operator and entrepreneur, Natarajan’s now donned the investor’s hat, guiding companies through their own growth. Though he acknowledges that not all companies are suited to public markets, he believes having an eye towards listing instils good discipline.

“An IPO forces good governance,” he reiterated. “But you can’t see it purely as an exit for investors. That’s my fear for today’s plethora of tech IPOs – are their systems in place, can they predict their next two quarters and be transparent?”

He believes his own portfolio companies are some time away from this. “We insist they put the right processes in place from day one, but realistically most won’t be IPO-ready in the next 5-7 years.”

He does see potential, though, in Deeptech, one of Mela Ventures’ focus areas. “Companies are solving critical India-specific problems, so the opportunity’s there. But there are hurdles to overcome. For one, there’s very little growth capital. There’s seed money available, and even series-A, but options are scarce for companies looking to grow to the next stage.”

“Also, they need to educate the market. Unlike Mindtree, which had 15 years of IT services trust to lean on, these companies are going into uncharted territory,” he concluded.

From Startup to IPO

Planning to go public

“When thinking of an IPO, be sure of the ‘why’,” said Alok Bansal, Co-founder and Executive Vice-Chairman of PB Fintech, PolicyBazaar’s parent company. “Do you want to raise capital, give investors an exit, or create liquidity for your cap table?”

More fundamental, Bansal emphasises, is a stable business model. “Investors won’t react well if you’re pivoting or don’t have the right team. And listing is a one-way street in India – you rarely go private again – so be certain if you’re going down that path.”

He stresses this. Public listing brings heavy scrutiny, not just from investors, but the media and regulators, that not everyone anticipates.

Not all companies are suited to Indian public markets either, Bansal clarified, which is why, despite initial plans in 2018, PB Fintech delayed listing for some years.

“After a decade of operation, we had a direction and foundation,” he explained. “With the business scaling, uncertainties around revenue, growth, and profitability were fading. So, around 2015 we started attending conferences, and talking to lawyers and bankers, to figure out if we were ready.”

“We weren’t fully convinced it was right for us. We were still relatively small and, despite a valuation of $1 billion, had limited revenue.”

The team’s concerns are understandable. As a consumer-facing tech firm, their business model differed from most Indian public companies. Though private investors understood their costs, revenues, and growth trajectories, they worried that public markets might not.

“Most public Indian companies till then were balance sheet players,” Bansal expanded. “PolicyBazaar, Zomato, Flipkart – we were all P&L (profit and loss) players. We invested heavily in tech, branding and products; because those costs aren’t amortized in accounts, we showed losses each year which Indian investors don’t necessarily appreciate.”

They stepped back, thought through their options, and even toyed with alternate routes like SPACs. When these didn’t pan out and the business reached a point where listing became more viable, they started the process in late-2020.

The following months were spent getting things in place – agreements with bankers and lawyers, their story for the public, governance structures and an independent Board of Directors, tools for operation, auditors to ensure compliance, and the right leadership team.

“These might seem like boxes to check,” he admitted, “but they can become massive hurdles. If any company’s thinking of IPOing in the next 2-5 years, they need to think through this diligently.”

The PolicyBazaar team wanted to be hands-on – it was a learning opportunity like no other – so instead of depending entirely on external help, they managed the process alongside their day-to-day work.

That said, the business team remained undisturbed and Sarbvir Singh was hired as CEO of PolicyBazaar so that Yashish Dahia (PB Fintech and PolicyBazaar’s other Co-founder) could focus on the IPO.

“These were painful months. There was also a lot of paperwork and marketing, which we weren’t sure how to go about because of the pandemic,” Bansal said. “Typically, you conduct several investor meetings to build momentum, but we couldn’t because of COVID. In fact, the first physical meeting with the entire syndicate working on the IPO happened on listing day!”

The complications of valuation

And what a listing day it was. Their IPO was oversubscribed 17 times, PB Fintech became the most valuable insurance marketplace worldwide on listing, and its shares rose 27% above IPO price on the first day.

Though this exceeded Bansal’s expectations, he tried not to be swayed by it.

“Honestly, valuation is a vanity metric,” he noted, bluntly. “I was just hoping we didn’t open below on listing day. My family, employees, and the media were watching, so I was relieved when we opened higher. Besides that, I’ve always believed that markets will reward you if you do right by your customers and partners, whether today or in five years.”

Being this zen isn’t easy, though.

Pre-IPO, there were conflicting noises around pricing. Their last private round valued them at $1.5-$2 billion, but a banker Bansal spoke to valued them around $4 billion, while grey-market pricing shot up.

“Eventually, we listed at a $6.15 billion valuation. It was higher than where we were with respect to scale, revenue, or EBITDA, but that’s what the market gave us,” Bansal said.

Following this dramatic rise was a fall. Share prices declined from a high of ₹1300+ in November 2021 to ~₹375 one year later. As with the highs, Bansal remained unperturbed.

“We as individuals weren’t buying or selling, so price fluctuations didn’t affect us,” he said, matter-of-factly. “Honestly, I understand fundamentals, not valuations. I know the business’ strengths and tell investors that they’ll make money if they stick around for three years, not a few weeks. Short-term pricing depends on sentiment, liquidity, and noise – we can’t control that.”

Though he’s not swayed by market sentiment, he acknowledges that better communication could have helped markets understand the company’s workings at different points.

“Yashish and I had to exercise ESOPS after the IPO,” Bansal explained, “but SEBI wouldn’t let us sell till mid-Feb 2022. Share prices fell by then, and us selling below the IPO price made news. I don’t think we effectively explained why we were selling, and that created unnecessary controversy.”

There were other instances, too. “Pre-IPO, we allocated a lot of ESOPs. The way Indian accounting works, their costs show up in the first year, even though vesting is over five years. This made our P&L accounts look worse than they were to the public. Over time, we learned to communicate these things better.”

Growing in the public eye

PB Fintech’s IPO was a landmark in many ways. Listing in the 2nd half of 2021 alongside companies like Zomato and Nykaa, it was proof that Indian startups could go mainstream, and that tech businesses targeting frugal Indian consumers could be sustainable.

According to Bansal, these companies’ success has made Indians more open to unorthodox models. After all, he noted, if conventional businesses like Jet Airways can tank, there’s no certainty that what’s known is what’s good. Management’s focus on strong fundamentals, he believed, would make markets comfortable betting on new-age ventures.

Still, Bansal claims that listing has had a limited impact on PB’s operations.

“Sure, if someone told us in B-School that we’d start, scale, and list a company, it would be like a dream,” he admits, “and I’m happy that we’d made 70 dollar-millionaires on listing day. Over 50 people had been with us for 10 years+ and I was glad they were being rewarded. For investors, consumer tech exits gave them confidence to look at India more positively and helped build the ecosystem.”

“But it’s not a full-stop in our business journey; It’s barely a comma,” he continued. “From the 5-, 10-, or 20-year perspective, not much changes. As management, we still need to make business decisions for the long-term, even if we’re on quarterly cycles for investors.”

“Around the IPO, we launched PB Partners, an agent aggregation business that required significant upfront investment. We also started a corporate insurance business around then. In 2022, we opened call centres in South India and launched a claims support team.”

“These decisions create inefficiency for 6-12 months, but we trust they’re right in the long-term. Just last year, investors weren’t happy with the idea of PB Health, our healthcare venture. There was backlash and stock prices fell, but eventually the market understood.”

Though not guided by narrow market sentiment, Bansal is clear on two things that management owes investors.

“First, you need to be consistent and predictable,” he said with a firmness in his voice. “Follow through on the promises you make. Second, never let your investors doubt you on compliance or governance. Always remember this, and the market will reward you,” he concluded.

Pathways

Any conversation about venture capital is essentially a conversation about innovation. Who’s got the next big idea, and who’s willing to put in the time and money it takes to make them a reality. In keeping with that, this month’s Pathways brings you three recommendations to help you understand innovation better.

First, How Innovation Works by Matt Ridley, an expert treatise that decodes this amorphous concept. By retelling the stories of innovators and their creations across the ages, Ridley sheds light on the conditions that foster innovation, how it’s often unwittingly shut down, and the collaborative, collective action that’s inherent to its success.

It’s only natural to follow that up with The Innovators by Walter Isaacson, a deep-dive into the personalities that created the digital age of today. Isaacson starts this history with Ada Lovelace, weaving his way to people like Alan Turing, John von Neumann, all the way to modern names like Time Berners-Lee, Steve Jobs, Bill Gates, and more.

Lest you think that innovation is solely the domain of private enterprise, Mariana Mazzucato’s got a lesson for you. In The Entrepreneurial State, she argues against the perception of the state being a bureaucratic or stifling body. Instead, using examples from the advent of the internet to emerging biotechnology, she shows how state investment was crucial to laying the ground for private success.

That’s it for this month from us. If you’re new and want the next issue of Odyssey in your inbox, subscribe above. Share this with people you know who are curious about everything at the intersection of tech, VC, and innovation in India.