At the start of the year, we knew that the IPO momentum was going to be super strong among Indian startups. Some of the most noted companies in the country — PhonePe, Urban Company, OYO, Pine Labs, Zepto and others — are on the cusp of going public and naturally, there was a lot of confidence among investors about exits and maturity in the startup ecosystem.

But in the past month or so, there is also a new wave of caution. Under the President Donald Trump administration in the US, global trade has been shaken to quite some extent, and markets are reacting every day to new developments and changes in trade tariffs.

Many believe this is a temporary pain that should not deter the IPO parade in India, but it will have some impact on new IPOs. The first sign of this was perhaps on display this week as Urban Company finalised its plans for the IPO and received its board approval.

But the final issue size might be well below previous expectations.

For one, the next set of IPOs are likely to be much smaller than the ones we have seen in the past four years. More and more companies will be looking to take a rational approach to fundraising in this current environment, and companies with minimal exposure to global trade winds will be the ones that will cash in.

Take for example, Urban Company, which was bullish about a mega IPO in late 2024 but has had to rejig its plans in the past two months. As we reported this week, the company’s board has approved raising up to INR 528 Cr (about $60 Mn) via a fresh issue in its IPO, in addition to an offer-for-sale component.

Incidentally, earlier this year, when the startup converted into a public entity, reports suggested that Urban Company was planning to file its draft papers for an INR 3,000 Cr IPO ($300 Mn ) before the end of March. While that timeline has since changed, clearly, so has the company’s appetite for fundraise from public markets.

It’s not just Urban Company — even EV maker Ather Energy is cutting its IPO size by at least $50 Mn (about INR 430 Cr) from its earlier target of $400 Mn (about INR 3,460 Cr) amid the ongoing........

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