India’s new-age economy set to triple to $300 bn by FY31; profits, IPOs and M&A poised to rise: Report

India’s new-age economy is projected to triple to around $300 billion in revenue by FY31, bringing it closer to the current scale of the country’s IT services industry, according to a report by Redseer Strategy Consultants. The consultancy estimates that combined revenue of new-age companies will rise from $33 billion in FY22 to around $100 billion in FY26, before expanding at about 25% annually through FY31.

The report defines new-age companies as digitally native businesses or those where technology is central to the business model. Consumption-led segments, including consumer goods and retail & leisure, are expected to remain the mainstay, growing around 25% annually to reach $150 billion by FY31 and retaining roughly half of the overall market. Emerging technology-led sectors such as TMT, AI and manufacturing are projected to grow faster at around 26% annually.

Profitability improves, but remains concentrated

The expansion is also accompanied by an improvement in profitability. Redseer said the combined EBITDA of new-age companies swung from a $4.8 billion loss in FY23 to a $1.4 billion profit in FY25, representing an improvement of roughly $6 billion over three years.

However, the report cautioned that the profit pool remains concentrated in BFSI. The sector accounted for about 140% of the FY25 profit pool, meaning the rest of the new-age economy remained loss-making in aggregate. Even at $300 billion of revenue by FY31, Redseer expects the overall profit pool to reach only $5–10 billion, implying a 2–3% margin, compared with 12–18% for listed FMCG companies and 20–25% for IT services.

Consumer brands reach scale faster, but ₹500 crore remains a hurdle

The report found that quick commerce and direct-to-consumer channels have significantly shortened the time required for consumer brands to scale. The average time to reach ₹100 crore in revenue fell from 6.8 years for the 2016 cohort to 3.4 years for the 2020 cohort, while the time to reach ₹500 crore declined from 7.9 years to four years.

Yet scaling beyond ₹500 crore remains difficult. Of around 110 brands founded since 2016 that have crossed ₹100 crore in revenue, only about 26 have crossed ₹500 crore, while just eight have exceeded ₹800 crore. Redseer expects the number of ₹100-crore-plus new-age consumer brands to rise from around 230 in FY26 to 500 by FY31.

Funding, IPOs and M&A set for expansion

Private-market funding is projected to rise 25% to $17 billion in CY26, with BFSI, TMT and AI accounting for 60–65% of deal value so far. By CY30, public and private funding for new-age companies could reach $50 billion annually, including $35 billion in private funding and $15 billion through IPOs. New-age companies could account for around 40% of India’s IPO proceeds, up from 25% currently.

Redseer also sees M&A becoming a larger route to value, with new-age company-related deal value potentially reaching $10 billion annually by CY30, up from a projected $2.5 billion in CY26.