IPO or M&A? Why Indian promoters are choosing both

Time of India

2 days ago

As India steps into the second half of 2025, the country's most
ambitious Founders
are exiting differently.
IPO
and M&A are no longer a binary choice. This is the dual-track exit era: When companies prepare for an IPO but keep strategic or financial M&A discussions alive. Long considered a hedge in Western markets, this approach is now an intentional and predominant playbook in India.
And this is not just talk.
IPO filings
of over INR 1.1 lakh crore (USD ~12.7bn) in H1, and more than USD 20bn in disclosed M&A deals, including inbound interest in fintech,
NBFCs
,
Q-commerce
, and defence, speak for themselves. However, the untold story lies deep beneath the filings, where Founders are engaging in a parallel choreography of multiple processes.
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From Backup Plan to Built-In Strategy
IPO used to be the aspirational route, while M&As always seemed to be Plan B. But 2025 has replaced this thinking. Today, founders prepare for IPOs to unlock M&A premium and vice versa.
What Has Changed?
Firstly, regulatory uncertainty posed roadblocks at the structural level. The reverse flip, i.e., the relocation of Indian-origin startups from Delaware/Singapore back into India, is now quite routine. Several high-growth companies have demonstrated that it is not only feasible but also rewarding, particularly with
Securities and Exchange Board of India
(SEBI) increasingly attending to technological intricacies in IPO vetting, along with MCA/RBI setting up easements in compliance procedures.
Secondly, late-stage capital has become selective, thereby forcing Founders to bake in some measures of optionality. The mere preparation of a Draft Red Herring Prospectus (DRHP), with its rigour in compliance, disclosures, and governance, forces a company to become exit-ready, however, whichever door it walks through.
Thirdly, market volatility exists. What might seem like a golden IPO window in Q1 can suddenly be gone by Q3. Running a synchronised M&A process provides a fallback or, in many cases, a much speedier, cleaner route.
IPO vs. M&A: What Founders Stand to Gain
IPOs pave the way for long-term growth capital, boost brand visibility, and create a public currency for future deals. M&As bring speed, valuation clarity, and the potential for strategic synergies. Today, Founders are not choosing one over the other; they are leveraging both. Dual tracking is no longer a fallback; it's a forward-looking strategy to maximise value, retain leadership, and shape the future on their terms.
Real-Time Instances: How India Is Playing The Dual Game
A leading fintech unicorn filed its DRHP to raise INR 2,600 crores, post its reverse-flip back to India in April 2025. No M&A deal is prima facie announced; however, indications suggest that the company is setting IPO valuation as the pricing anchor for strategic acquirers.
Meanwhile, a prominent quick commerce player has quietly advanced its dual-track agenda. After re-domiciling to India in 2024, its path to IPO was always expected. However, multiple suitors are reportedly circling, and the company seems to be using M&A interest as a pricing test before officially filing its DRHP.
In the industrial space, a major building materials company has taken a textbook dual-track approach. While it has SEBI's nod for an INR 4,000 crore IPO, it is also actively exploring inorganic expansion via distressed asset acquisitions under India's Insolvency and Bankruptcy Code (IBC) framework. This two-pronged play supports growth and enhances the company's appeal to both public investors and strategic buyers.
These are no longer isolated cases, but structural changes affecting the exit planning side, as well as the way Indian companies view liquidity strategy in comparison with timing, readiness, and leverage.
Dual-Track Being Execution-Heavy Is Worth It
The true dual-track process is by no means a passive hedge, but an execution-intensive strategy. Companies must maintain two parallel data rooms - one for IPO diligence and the other for private buyers. The narrative must be tailored differently - growth, governance and scalability for public markets; synergies and market consolidation for strategic buyers. Advisors such as bankers, lawyers, and consultants need to be coordinated to run parallel but distinct processes. Public disclosures like DRHP filings must be timed with precision. They can be used tactically to spark or strengthen M&A conversations, creating price tension across both tracks.
What H2 2025 Will Bring
The IPO calendar for H2 2025 is packed, with several large companies across infrastructure, fintech, and consumer sectors preparing to test public market appetite. Meanwhile, strategists sit on record dry powder. Global majors in defence, payments, and consumer internet are scouring India not for early-stage bets but for exit-ready, governance-strong assets.
Pre-IPO dealmaking is likely to accelerate, particularly for companies in the INR 500–2,000 crore revenue band, where public market appetite may remain sector-sensitive or ambiguous. Dual-track exits will also expand beyond tech into new verticals such as renewables, EV infrastructure, healthcare delivery, and logistics.
Interestingly, the DRHP itself is gaining a new role, less as a declaration of IPO intent, more as a pricing discovery tool. Increasingly, founders and boards are using it as the new term sheet, signalling readiness and setting valuation benchmarks that strategic buyers must react to.
The Bigger Picture
We believe the rise of dual-track exits marks more than just a tactical shift; it signals a maturing of India's private capital ecosystem. This is where Founder ambition meets institutional discipline. Companies are no longer reactive to market sentiment; they're proactively shaping outcomes with optionality built into every decision. Dual tracking is not about indecision, but intelligent design. For founders, it means greater control over timing and valuation. For investors, it offers more flexible exit pathways. And for India Inc., it points to a new era of dealmaking, one that blends global capital sensibilities with India's appetite for innovation and growth.
(The author is
, Partner, Deal Value Creation Services, BDO India)