India’s startup IPO scene is buzzing, but Trump’s Tariffs are casting a dark cloud. These new US trade policies are creating uncertainty, forcing startups to rethink their public listing plans. With 36 startups in the IPO pipeline, Trump’s Tariffs could scare off foreign investors, disrupt valuations, and delay launches. Let’s unpack how Trump’s Tariffs are shaking things up.
Billions On The Line
India’s startup ecosystem is on the verge of a massive IPO wave. Our IPO tracker shows 36 startups gearing up to raise over $20 billion (INR 1.6 lakh crore) in the next two years. Heavyweights like PhonePe, OYO, PhysicsWallah, Of Business, and Urban Company are set to lead in 2025 and early 2026.
These startups have already secured $12.2 billion (INR 1.1 lakh crore) in venture capital and private equity funding. Their IPOs are a golden opportunity for investors to cash out, but Trump’s Tariffs are causing jitters. Since September 2024, foreign institutional investors (FIIs) have yanked over INR 2 lakh crore from Indian equities, spooked by Trump’s Tariffs and global uncertainty. Startups need these FIIs to drive demand for their IPOs.
Why are startups rushing to go public despite Trump’s Tariffs? Many want their foreign investors to lock in returns before markets get shakier. It’s a high-stakes race, and Trump’s Tariffs are raising the pressure.
Indian Startup IPOs Under Trump’s Tariffs
Trump’s Tariffs, including a 26% levy on Indian goods, are part of his “Liberation Day” push to boost US manufacturing. But they’re sending shockwaves through India’s startup ecosystem. “Markets are on edge because of Trump’s Tariffs,” says a Mumbai-based investor who’s backed three IPO-bound startups. “Startups just want to get their IPOs done before the uncertainty grows.”
There’s a tactical reason for the IPO rush. By filing draft red herring prospectuses (DRHPs) before April, startups can use September 2024 financials, sidestepping weaker December quarter results impacted by Trump’s Tariffs and global slowdowns. It’s a clever way to look stronger to investors.
In the US, Trump’s Tariffs have frozen IPO activity. Keith Canton from JPMorgan Chase & Co told Bloomberg that US deals are on hold, with investors reassessing daily. In India, startups like Urban Company and Ather Energy are scaling back, cutting IPO sizes and valuations to align with the cautious vibe created by Trump’s Tariffs.
“Trump’s Tariffs have cooled the market. Valuations are being reset, and IPOs are priced for reality,” says V Jayasankar from Kotak Investment Banking.
Forget Sky-High Valuations Amid Trump’s Tariffs
Which startups face the biggest risks from Trump’s Tariffs? Investors warn that small and mid-cap IPOs could struggle as fears of value erosion grow. Big names like Zepto, boAt, and OfBusiness, chasing premium valuations, may also hit roadblocks due to Trump’s Tariffs.
“Startups expecting VC-style valuations in public markets will struggle under Trump’s Tariffs,” the Mumbai investor says. “The ecosystem has shifted.”
Sectors like e-commerce, logistics, and consumer tech, which often rely on US markets or foreign funding, are especially vulnerable to Trump’s Tariffs. Take Ecom Express: it was acquired by Delhivery at a 50% discount to its planned IPO raise, proving that high revenues don’t guarantee success in the shadow of Trump’s Tariffs. Investors are scrutinizing financials for any weak spots.
The takeaway? Startups must price IPOs sensibly or face turbulence in a market rattled by Trump’s Tariffs.
Global Market Ripples From Trump’s Tariffs
Trump’s Tariffs aren’t just hitting India—they’re rocking global markets. Higher costs on imports to the US are squeezing supply chains, raising prices, and spooking investors worldwide. Emerging markets like India, which rely on US trade and foreign capital, are feeling the pinch as Trump’s Tariffs fuel fears of a broader trade war. Stock markets in Asia and Europe have seen volatility, with investors pulling back from riskier assets like startup IPOs. For Indian startups, this means less foreign cash flowing in, tighter valuations, and a tougher road to going public. If Trump’s Tariffs escalate, they could trigger a global slowdown, making it even harder for startups to win investor confidence.
Stock In Focus: Zomato’s Defense Against Trump’s Tariffs
Zomato’s parent, Eternal, is taking a bold stand against Trump’s Tariffs. It’s capping foreign ownership at 49.5%, limiting stakes from FIIs, foreign portfolio investors, and NRIs. This move follows Commerce Minister Piyush Goyal’s concerns about foreign shareholding in quick commerce, but it’s also a shield against risks tied to Trump’s Tariffs.
By maintaining its “Indian-Owned-And-Controlled-Company” status, Zomato says it can innovate faster, support local entrepreneurs, and deliver stronger returns. It’s a strategic play to reduce exposure to market volatility driven by Trump’s Tariffs. Rival Zepto is following suit, boosting domestic shareholding ahead of its IPO.
With FIIs selling INR 1.62 lakh crore in Indian shares recently, partly due to Trump’s Tariffs, these moves could stabilize companies. But will more Indian investors offset the foreign pullback?
IPO Watch: New Issues, DRHPs & More
Here’s the latest on India’s IPO scene amid Trump’s Tariffs:
- Zepto’s Rebrand: Zepto has changed its name from Kiranakart Technologies to Zepto Private Limited to prep for its IPO.
- PhonePe’s Milestone: Walmart-backed PhonePe is now a public company, targeting a $15 billion valuation despite Trump’s Tariffs.
- Razorpay’s Plan: Razorpay has gone public but says its IPO is two years out, navigating Trump’s Tariffs cautiously.
- Paytm’s ESOP Shift: Paytm CEO Vijay Shekhar Sharma surrendered 2.1 crore unvested stock options after SEBI scrutiny, returning them to the ESOP pool.
Trump’s Tariffs are creating a stormy backdrop, but India’s startup IPO pipeline is still moving. With global markets recovering unevenly, the next few months will show if startups can weather Trump’s Tariffs. By adjusting valuations, timing DRHPs wisely, and localizing ownership, they’re fighting to keep the IPO party alive.
