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India to Overtake China to Become Global IPO Leader

Chinese indexes saw double digit falls in the number of IPOs, compared to last year, amid geopolitical tensions with the West and increasing scrutiny from Beijing regulators

The logo of the Bombay Stock Exchange (BSE) building is seen in Mumbai, India, on July 12, 2023. REUTERS/Francis Mascarenhas/file photo
The logo of the Bombay Stock Exchange (BSE) building is seen in Mumbai, India. Photo: Reuters.


India is set to become the IPO hub of the world this year, usurping China from a position it has held for years.

Indian financial capital Mumbai saw more initial public offerings (IPOs) on its two indexes in 2023, than China’s three exchanges, according to a report by Nikkei Asia.

IPOs on Mumbai’s National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) were on course to jump 45% compared to last year, the report said, citing data from Ernst & Young.


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Meanwhile, Chinese indexes saw double digit falls in the number of IPOs, the report added. The Shanghai Stock Exchange (SSE) led the fall with a 36% drop, while the Shenzhen Stock Exchange (SZSE) saw a 33% year-on-year drop in the number of IPOs.

The Hong Kong Stock Exchange also saw a 19% fall in IPOs, compared with last year.

The fall in the number of IPOs on Chinese exchanges has been driven not just by its geopolitical tensions with the West, but also a tightening regulatory structure for listings.

In August, Chinese regulators decided to restrict IPOs on the mainland to boost the secondary market. Earlier in the year, Beijing also stepped up scrutiny of offshore listings, leading to a large backlog of applicants.

India, meanwhile, is benefitting from a young demographic and investor confidence in the economy and increasing liquidity in the hands of domestic investors, analysts said.

The country is also emerging as an alternate destination for manufacturers looking to de-risk their supply chains from China.

Companies are also rushing to list ahead of the Indian General Election between April-May 2024, in order to avoid “market volatility”, analysts told Nikkei.



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Dog days for Hong Kong

Even so, Indian exchanges are still behind mainland Chinese counterparts in IPO proceeds, Nikkei Asia said. They are still set to go past Hong Kong in the level of fundraising, the report added.

Hong Kong has dominated the global IPO marker for nearly two decades but increasing scrutiny of Beijing regulators has also weighed on the city-state, eroding its position as the world’s financial hub.

Stringent Covid-19 restrictions, which triggered the exit of top financial firms and executives from Hong Kong, has also irked investors since last year.

“Market sentiment is even worse than 2008,” Alex Wong, a partner of Alex KY Wong Asset Management Company, told Reuters in October.

According to EY data, Hong Kong’s fundraising is set to tank 58% this year, Nikkei said.


Bubble worry

IPOs worth $900 million went to market in India in just the last ten days in November.

The country’s biggest IPO for the year was that of pharmaceutical firm Mankind Pharma, which raised more than $500 million in a listing that was oversubscribed 15 times. The firm’s shares gained 31.7% in their trading debut, giving it a valuation of near $7 billion.

But the boom in Indian fundraising was also a cause of concern for some analysts.

Nitin Bhasin, head of institutional equities at Indian finance firm Ambit, told Nikkei Asia that he feared “irrational exuberance” pumping up the country’s equities.

India’s benchmark Nifty 50 is up close to 14% for the year and ended trading on Monday at an all-time-high. BSE Sensex also scaled a new high, with gains of over 12.5% for the year.

Upcoming companies eyeing IPOs in India include the country’s largest e-scooter maker Ola Electric, food delivery giant Swiggy, drugmaker Emcure Pharmaceuticals and Netherlands-based fintech firm PayU.

Forty companies, valued more than $5 billion, are waiting for regulatory approval to list in India, Nikkei said citing markets research agency Prime Database.


  • Vishakha Saxena


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Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]


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