ETtechAs Indian startups prepare for public listings and the debate between growth and profitability heats up, Razorpay chief financial officer (CFO) Arpit Chug said profitability may be the buzzword of the past year, but growth remains the stronger driver of initial public offering (IPO) readiness.
“We are over-indexing in the last 12 to 15 months on the idea that if you have to go public, you have to be profitable. I’m not saying profitability is bad, but growth is actually more important,” Chug said during a panel discussion at the ET Soonicorns Summit. “Have you ever seen a company with no growth going public? Growth is almost a prerequisite. Of course, if you have both growth and profitability, you’re more attractive, but the balance needs to remain throughout.”
His comments come at a time when several Indian startups are adjusting business models to demonstrate profitability ahead of listings, following years of cash burn. The Reserve Bank of India’s (RBI) tighter regulatory framework for fintechs has also put additional pressure on players like Razorpay to show stronger compliance and sustainable growth.
Razorpay had completed the reverse flip of its parent entity from the US to India earlier this year. In December 2024, Razorpay’s chief executive, Harshil Mathur, told ET that the company was targeting full profitability within 18 months and aiming to go public in two years.
Chug added that IPO readiness should not be viewed as a short-term project a few months before a listing. In his view, companies often make the mistake of trying to time the market, whereas a public listing is a long-term commitment where individual quarters have limited significance.
Meanwhile, Sohil Parekh, CFO of electric scooter maker Ather Energy, which recently went public, said that investors in India’s capital markets have matured and now evaluate companies on a broader set of parameters beyond immediate profits.
“Public investors have evolved over time. There is a lot of focus on the strength of management, governance, compliance, and the company’s long-term strategic planning,” Parekh said. “If your margins and product roadmap are strategically stacking up, then public market investors now have the maturity to appreciate and understand the different dynamics across industries.”
Also Read: ET Soonicorns Summit 2025: Data privacy an afterthought while building products, says Razorpay COO
“We are over-indexing in the last 12 to 15 months on the idea that if you have to go public, you have to be profitable. I’m not saying profitability is bad, but growth is actually more important,” Chug said during a panel discussion at the ET Soonicorns Summit. “Have you ever seen a company with no growth going public? Growth is almost a prerequisite. Of course, if you have both growth and profitability, you’re more attractive, but the balance needs to remain throughout.”
His comments come at a time when several Indian startups are adjusting business models to demonstrate profitability ahead of listings, following years of cash burn. The Reserve Bank of India’s (RBI) tighter regulatory framework for fintechs has also put additional pressure on players like Razorpay to show stronger compliance and sustainable growth.
Razorpay had completed the reverse flip of its parent entity from the US to India earlier this year. In December 2024, Razorpay’s chief executive, Harshil Mathur, told ET that the company was targeting full profitability within 18 months and aiming to go public in two years.
Chug added that IPO readiness should not be viewed as a short-term project a few months before a listing. In his view, companies often make the mistake of trying to time the market, whereas a public listing is a long-term commitment where individual quarters have limited significance.
Meanwhile, Sohil Parekh, CFO of electric scooter maker Ather Energy, which recently went public, said that investors in India’s capital markets have matured and now evaluate companies on a broader set of parameters beyond immediate profits.
“Public investors have evolved over time. There is a lot of focus on the strength of management, governance, compliance, and the company’s long-term strategic planning,” Parekh said. “If your margins and product roadmap are strategically stacking up, then public market investors now have the maturity to appreciate and understand the different dynamics across industries.”
Also Read: ET Soonicorns Summit 2025: Data privacy an afterthought while building products, says Razorpay COO
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