How Delhi NCR overtook Bengaluru and Mumbai in the startup IPO race

ABSTRACT

In Delhi NCR, 15 startups listed on the stock exchanges, followed by 7 in Mumbai and 3 in Bengaluru

Of the 35 startups listed under Inc42’s coverage, Delhi-based Zomato is India’s most valuable startup with a market capitalization of around $30 billion

Even with many startups set to debut on the public market soon, Delhi NCR is expected to retain its leadership position in terms of startup IPOs

Despite Bengaluru being the startup capital of India, Delhi NCR leads India’s “Silicon Valley”, Bengaluru, with a very comfortable lead in the startup IPO race.

According to Inc42’s ‘The State Of Indian Startup Ecosystem Report 2024’, 15 new-age technology companies from the National Capital Region are listed on stock exchanges. Delhi NCR-based companies constitute 43% of the 35 such listed companies covered by Inc42.

Delhi NCR-based listed startups include fintech major Paytm, logistics unicorn Delhivery, grocery giant Zomato, Mamaearth parent Honasa Consumer, among others. In comparison, only three Bengaluru-based startups have been able to go public so far – electric vehicle (EV) maker Ola Electric, market intelligence platform Tracxn and Nasdaq-listed Zoomcar.

Interestingly, the financial capital of the country is also ahead of Bengaluru in the startup IPO race. So far, seven Mumbai-based startups have gone public, including co-working space provider Awfis, insurtech startup Go Digit, beauty e-commerce major Nykaa, gaming major Nazara Technologies, fintech Fino Payments Bank and hyperlocal search engine provider Justdial.

Like Bengaluru, Pune also saw three startup listings. While Chennai and Ahmedabad each have two listed startups, Mohali, Hyderabad and Jaipur each have one startup listed on the stock exchanges so far.

How Delhi moved forward

Delhi NCR is leading in the startup IPO race, although it is not a leader in terms of the number of registered startups in the country. According to government data, as of June 30, 2024, there were 1,40,803 startups registered with the Department of Promotion of Industry and Internal Trade (DPIIT).

Maharashtra topped the list with 25,044 startups, followed by Karnataka with 15,019 startups. While the national capital, Delhi, had 14,734 startups, the number in Uttar Pradesh and Gujarat was 13,299 and 11,436, respectively.

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It is also worth mentioning that Bengaluru continues to lead in terms of startup financing trends. Indian startups raised $151 billion across 10,500 deals between 2014 and the first half of 2024. Of these, Bengaluru-based startups raised the highest capital of over $70 billion.

In comparison, Delhi NCR-based startups raised $44 billion during this period, followed by Mumbai-based startups at $20 billion.

So how did Delhi NCR skyrocket in terms of IPOs? According to 100X.VC founder Shashank Randev, there are three key factors behind this – access to more land, more business-to-government (B2G) opportunities thanks to geographical proximity to the central government, and access to talent.

“Mumbai and Bengaluru are more geographically crowded and the ecosystem often becomes confined to one part of the city. In NCR, you get a chance to create spaces in Delhi, Gurugram and Noida without any connectivity issue. Apart from this, the startup hub is also better connected to the political ecosystem and is not too far from India’s financial capital, Mumbai. Thanks to this, the city has access to all kinds of resources,” Randev said.

He added that while Bengaluru-based startups have better access to talent, the inflow of tech talent to Delhi NCR is increasing given the potential of this regional capital region to expand geographically and offer greater opportunities.

Agreeing with this, Auxano Capital partner Brijesh Damodaran said, “This is due to a confluence of several factors, namely market maturity (Delhi has had 36 IPOs in the last four years, second only to Mumbai with 50 IPOs), government support due to to close proximity and diverse industry representation combined with the presence of major educational institutions providing skilled human capital, as well as the entrepreneurial bug.”

Zomato – Most Appreciated Startup

The total market capitalization of 35 publicly traded new-age technology companies as of September 2 was more than $112 billion. Of this, Delhi NCR-based startups accounted for 71.4% of the cumulative market capitalization.

Meanwhile, startups from Mumbai and Bengaluru accounted for 14.2% and 6.2% of the market capitalization respectively.

From an individual point of view, the most valued start-up is Zomato, a major tycoon in the food industry. As of September 2, Zomato’s market capitalization was $27 billion. Market capitalization later in the month exceeded the USD 30 billion mark.

Meanwhile, one of India’s oldest internet companies, Info Edge, is the second most valued company with a market capitalization of over $12 billion. In second place are MakeMyTrip and Policybazaar’s parent companies, PB Fintech, which have market capitalizations of around $11 billion and $10 billion, respectively. It is worth noting that all the above-mentioned companies call Delhi NCR their home.

Further startup IPO plans

Amid the ongoing 2024 IPO boom, as many as 10 new-age technology startups have so far listed on stock exchanges. WITH plenty of startups looking to make their public debut soonDelhi NCR is expected to maintain its leading position in terms of startup IPOs.

The following startups have received SEBI nod for their IPOs or are awaiting the market regulator’s approval to proceed with their public listing plans:

In addition, there are plenty of other startups, including: Zepto, Shadowfax, IndiQube, Pure EV, Physics Wallahthey will appear at public auctions in the near future. Hence, startup IPOs are expected to continue next year as well, with Delhi NCR likely to continue to top the list.

“Top cities like Delhi, Mumbai and Bengaluru will continue to hold their ground as more and more startups look to go public. As startup investing becomes more democratized and gains popularity in cities, more startups from these cities will emerge in the coming decade. Regardless of the city in which the company is based, the ecosystem should develop. Moreover, with the continued adoption of SME IPOs, all companies may look to raise capital through public markets,” said Damodaran of Auxano Capital.

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