Indian AI-led startups to IPO, add up to USD 100 bln to m-cap in 5 yrs: Report

Private investments in Indian artificial intelligence (AI) startups are growing rapidly, and the eventual listing of such entities could add up to USD 100 billion to the country's market capitalisation over the next two to five years, a foreign brokerage said on Wednesday.

Private equity (PE) investment in Indian AI startups tripled in 2025 to USD 5 billion from USD 1.6 billion in 2024, Goldman Sachs said in a report.

It said 84 "Private AI Contenders" are currently valued at around USD 55 billion.

The report arrived at the m-cap benefit by assuming the eventual listing of such AI-led startups, based on a few assumptions about the way forward for these companies.

"We estimate approximately USD 50 billion to USD 100 billion in incremental market cap could be added to India's listed AI complex from prospective IPOs over the next 2-5 years, assuming 25-50 per cent of the ~70 mid-to-late stage Private AI Contenders list at a weighted average 4x valuation step-up," the report said.

These companies span the full AI value chain, from Upstream AI Enablers building foundational infrastructure, to Midstream AI Core Engines conducting core model research and development, to Downstream AI Adopters applying AI/ML across end-markets, and range from early-stage to mid-to-late-stage companies, the report said.

The report comes at a time when experts blame the lack of AI-themed stocks for foreign institutional investors exiting the Indian equity markets.

Citing a Stanford University report, the brokerage said India now ranks among the top six global destinations for private AI funding and the top four for newly-funded AI companies.

The share of total PE funding directed toward Indian AI startups has risen in lockstep, from roughly 5 per cent in 2024 to 20 per cent in 2026, a four-fold increase in capital allocation intensity in just two years, it said.

"This scale of funding challenges a broad perception we hear from investors that India is peripheral to the global AI buildout," Goldman Sachs said.

As per the Stanford report, India ranked as the sixth largest destination for private AI funding globally in 2025, ahead of most major economies outside the US, China, UK, France and Canada.

It also said India recorded the fourth-largest number of newly funded AI companies worldwide, trailing only the US, the UK and China.