Can a deep-tech start-up with no revenue list in India?
| AUTHOR | Arindam Goswami |
| DATE | October 30, 2026 |
| CATEGORIES | High Tech Geopolitics Research and Development Deep Tech Public Markets |
SEBI’s chairman said on 28 October that the IGP and SME IPO rules are under review, and Ather Energy reported its first quarterly profit two days earlier. A Takshashila study of pre-revenue listings in the US, China and Hong Kong suggests the review should settle one question that India’s rules leave open: can a deep-tech firm with no revenue list?
Why it matters. Deep-tech start-ups raised about $530 million in 2025, while IPOs in 2025-26 raised Rs. 1.89 lakh crore (roughly $21 billion). A listing lets venture investors exit and gives the firm further equity, and a study of 32 countries found that equity markets raise innovation in technology-intensive industries. In 80 countries, R&D intensity was higher where more shares were traded relative to GDP, but not within countries over time. India’s market size of 114 per cent of GDP is not the limit.
What India’s rules say. Regulation 6(1) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 asks for three years of operating profit. Regulation 6(2) removes the profit test if 75 per cent of the offer goes to institutional investors. There’s nothing about revenue as such. Ather listed while loss-making and Tonbo Imaging has SEBI approval, but both have revenue. No pre-revenue deep-tech listing could be found, and the IGP had no listing as of 2021.
The US. Among 945 life-science IPOs from 1991 to 2025, 43 per cent had zero sales. The share was 20 per cent until 2012 and 61 per cent from 2013, a rise in odds of about six times, and the rise has been gradual, so it cannot be tied to one rule change. Venture-backed life-science IPOs trailed the market by about 24 per cent over three years, so later buyers lost on average.
China. The STAR Market’s fifth standard requires an expected value of at least 4 billion yuan and no profit. Twenty-two firms used it; 21 won drug approvals and 16 passed 100 million yuan in revenue. Of 57 firms listed while unprofitable, 22 (39 per cent) have turned profitable.
Hong Kong. Chapter 18A had 94 listings by July 2026. Chapter 18C for specialist technology, opened in 2023, has 14, with a HK$6 billion floor for pre-commercial firms.
The pattern. Pre-revenue listing is mostly biotech, where a trial or approval milestone shows progress. Hard-technology pre-revenue listing is new, at 14 listings in Hong Kong and a few on the STAR Market. India would, therefore, be designing for a case with a short record. Each market pairs the missing profit history with a milestone, a value floor and institutions already holding the shares.
Six changes to consider that can flow from the above analysis.
State in the rules that zero revenue is eligible in notified deep-tech sectors, given one government-linked milestone (iDEX procurement clearance, IN-SPACe authorisation, semiconductor-mission approval) and recent institutional co-investment.
Keep the IPO institutional and allow regular trading from day one.
Let the Deep-Tech Fund of Funds under the RDI scheme anchor up to 10 per cent, matched by private institutions.
Appoint market makers for three years and create a deep-tech index. A market maker is a firm that always quotes a price to buy and a price to sell a given share. A newly listed deep-tech company has few buyers and sellers on any day, so an investor who wants to sell may have to accept a poor price or wait. A market maker removes that problem by standing ready on both sides.
Apply SEBI’s proposed third-party monitoring of IPO proceeds to research spending, with six-monthly milestone reports and a ‘U’ marker (a visible letter on the stock screen showing the company is loss-making. China’s STAR Market does this, so a retail buyer can see the risk at a glance).
Review in 2029: at least five listings, most reaching first revenue within three years, no shell-like listing. This would be a modest target, because Hong Kong’s comparable route for specialist technology has produced only 14 listings in over three years.
China and Hong Kong set the floor at US$550 million to US$770 million, which would exclude almost every Indian start-up. The working figure for India is a judgement, but SEBI should publish it with its reasoning.