By Gaurav Goyal, Senior Director, M&A business leader, India, Middle East and Africa, Mercer
India has emerged as one of the most dynamic initial public offering (IPO) markets in the world. In the first half of 2025 alone, Indian companies raised over $6.7 billion through public listings, surpassing the IPO proceeds from all of 2024. July stood out as the busiest month, with more than a dozen firms collectively raising over Rs 10,000 crore and marquee names like NSDL, Travel Food Services, and Anthem Biosciences commanding strong investor interest. With over Rs 25,000 crore worth of IPOs still in the pipeline including big names such as Tata Capital, PhonePe, and Meesho, India is not just participating in the global IPO race, it’s leading it.
This surge is underpinned by strong economic fundamentals. India remains the fastest-growing major economy, with a projected GDP growth rate of 6.8% for FY25. Capital markets have deepened significantly, retail investor participation has grown exponentially, and regulatory bodies have streamlined IPO approvals to encourage more private enterprises to go public. But as attractive as these macro conditions are, going public is not just a financial transaction, it is a fundamental cultural transformation.
An IPO represents a shift from founder-led agility to institution-driven accountability. Companies face not just quarterly reporting pressures but also heightened expectations from regulators, investors, and analysts. There is greater scrutiny on environmental, social, and governance performance, governance maturity, and risk disclosures. In this context, Indian companies preparing to list must look beyond valuation and investor excitement. They must evaluate whether they are organisationally, culturally, and strategically ready for life as a public company.
India’s transformation into a global IPO hub is rooted in macroeconomic stability and investor confidence. With inflation moderating, a stable interest rate regime, and a thriving start-up ecosystem, global and domestic capital is increasingly flowing into Indian equities. The government’s push for formalisation and digitisation has enabled a pipeline of scalable, tech-driven businesses ready for capital markets. India’s robust regulatory environment and high levels of investor liquidity have further catalysed this momentum. Additionally, Indian firms often enjoy high valuations driven by growth prospects, making IPOs an attractive option for founders and early investors.
Despite this favourable climate, IPO-bound Indian firms must exercise caution. A secondary research of c.100 organisations listed on India’s stock exchanges since 2022 indicates a different story. About 47% of the listed organisations are trading below their listing price and only 42% have outperformed the benchmark index.
IPO success depends as much on people as it does on numbers. The shift from a private to a public company is a gear change in culture. Indian employees must understand the impact of this transition on their roles, incentives, and accountability. Leadership must model a mindset of transparency and consistency, and internal communication becomes critical to manage expectations and change fatigue.
Several challenges typically surface during IPO readiness. Founders may struggle to balance their entrepreneurial instincts with the expectations of public governance. Executive compensation often falls short of public market norms, potentially causing confusion or even employee attrition. Since 2022, 19% of organisations have seen at least one key management personnel leave within the first six months of listing. This figure more than doubles to 49% within 24 months of the IPO.
Board-level movement follows a similar trend—6% companies experience the resignation of at least one board member within six months of listing, rising to 28% within two years. Such departures can unsettle investors, disrupt strategic continuity, and stress the need for well-designed retention initiatives and succession frameworks to maintain leadership continuity post-IPO. The cultural shift from a fast-paced, innovation-driven mindset to one focused on measured performance and rigorous governance can lead to frustration, if not managed effectively. Even then in many cases, succession planning is a check in the box item for the nomination and remuneration committee with little to no effort on identifying and developing successors for critical positions.
Organisations that succeed post-IPO invest early in aligning their people strategy with long-term business goals. This includes conducting comprehensive diagnostics to assess cultural readiness, redesigning total rewards and performance management systems, and implementing succession planning and leadership development programmes to support scalable governance. Building internal change management teams is also essential to help the organisation navigate the transition smoothly and sustain momentum beyond the listing.
Of the 53% of the listed organisations that have a positive stock movement, c. 45% of them have implemented a long term-incentive plan as a retention measure within one year from the date of IPO. Of the 30% organisations where stock price decreased by over 20%, only 20% of them have introduced a long-term incentive plan within one year of the date of IPO.
The IPO frenzy in the US and Southeast Asia during 2020-2022 offers a cautionary tale. Many high-profile listings faltered post-IPO due to poor planning, lack of internal readiness, and misaligned business models. Indian companies have the advantage of hindsight and must use it to their benefit.
Post-listing, the journey only begins. Sustaining investor trust, retaining key talent, maintaining a healthy culture, and evolving governance practices are ongoing imperatives. Indian public companies must continue to invest in upskilling, leadership continuity, and business resilience. A long-term view is critical, especially in a market such as India that rewards consistency and clarity.
India’s rise as an IPO powerhouse is not accidental. It reflects economic strength, regulatory maturity, and the entrepreneurial spirit of its businesses. Going public is a once-in-a-lifetime event for an organisation and requires diligent planning and execution on many fronts. While rewarding, it is a cumbersome and complex process and discounting the people risks can derail the process or result in adverse financial outcomes post-IPO. There is no magic pill for a successful IPO. Identifying critical human capital issues in the context of an IPO and prioritising people strategies may help improve the prospects of a favourable experience and positive outcome in the longer run. For companies to thrive in public markets, they must do more than ride the wave and should not just see this as a funding mechanism, but as a proving ground for enduring value.