VCs Take Backseat as Indian Start-Ups Raise $5.3 Bn from Public Markets in FY25

Venture capital-backed Indian start-ups rose over ₹44,000 crore (approximately $5.3 billion) in FY25 from public markets via IPOs, FPOs, and QIPs, according to an independent investment bank for private markets, Rainmaker Group’s RainGauge Index FY25 annual data.

The trend shows that public markets outpaced private capital for late-stage fundraising, solidifying their role as the dominant source of growth capital.

This is also the first full market cycle for Indian start-up listings: from euphoric IPOs in 2021-22, sharp corrections in 2023, and rationalisation in 2024, to a new phase of resilience and re-rating, the company said in an official statement.

The year also saw a record ₹20,000+ crore in secondary exits as PE/VC firms like Peak XV and TPG harvested early bets through block trades. Meanwhile, mutual fund participation surged, with average holdings in RainGauge Index companies rising from 10% in March 2024 to 14% in March 2025.

The data came in the backdrop of a cyclical economic slowdown in Indian in FY25, which caused a lot of consumer-facing companies to battle margin compression and weak topline momentum.

“FY25 didn’t just test India’s start-up listings, it matured them. The public market has become the preferred playground for India’s breakout companies. We’ve now seen the full arc - the IPO frenzy, the valuation winter, and now a clear re-rating driven by fundamentals. This is the age of seasoning,” said Kashyap Chanchani, Managing Partner, The Rainmaker Group. 

He said the market is no longer listening to stories, it’s pricing in substance. The report also highlighted some structural wins that FY25 delivered. These include, Zomato joining the NIFTY50 and SENSEX; Swiggy entering the NIFTY Nex 50; Nykaa, PB Fintech, Ola Electric, and others inducting into the NIFTY MidCap150, and more.

It also revealed that despite the early-year correction and record FII outflows of ₹78K crore in Q1, foreign investors returned strongly by Q4, driven by rate-cut expectations and India’s steady macro indicators.

In short, Raingauge stated that start-ups can now be segmented into four clear performance archetypes: those achieving scale with profitability, growing at the cost of margins, optimising for profit over growth, and those under pressure on both.

FY25 made this segmentation stark, while companies like Policybazaar and CarTrade delivered profitable growth and strong re-ratings, others like Zomato and Delhivery balanced scale with selective margin recovery. In contrast, segments like quick commerce and EVs remained in high-burn territory, drawing sharper scrutiny.