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Surge in Indian Equity Capital Market Deals Seen Continuing

The huge surge in Indian equity deals is expected to continue in the second half, and some analysts say more IPOs could also be seen in Hong Kong

People stand outside the Bombay Stock Exchange (BSE), after Sensex surpassed the 60,000 level for the first time, in Mumbai, India, September 24, 2021. REUTERS/Francis Mascarenhas
India’s total equity capital market deals jumped 137% in the first half of this year. This shot shows people outside the Bombay Stock Exchange in Mumbai. Photo: Reuters.


A string of huge deals in India, plus a possible revival in IPOs in Hong Kong after a rise in regulatory approvals are expected to lift equity deals in Asia in the second half of this year.

India’s share of Asian equity capital market (ECM) deals is at a record high now, according to analysts and bankers, who say the surge is likely to last for the foreseeable future.

India’s total ECM deals jumped 137% in the first half of this year from the same period of last year, with $28.5 billion raised, according to LSEG data. IPOs accounted for $4.25 billion of that, up 89% on last year’s first half.


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Hyundai India’s $2.5 billion to $3 billion IPO due later in 2024 is set to be the South Asian country’s largest ever new share sale, and it would also be one of the biggest IPOs globally this year.


Mainland China IPOs at 11-year low

In comparison, elsewhere in Asia, mainland Chinese ECM deals dropped nearly 70% to be worth $25.5 billion and IPOs were off 83% to $5.3 billion, the worst first half performance in 11 years.

The value of IPOs in Hong Kong fell from $2.12 billion in the first half of 2023 to $1.46 billion, the LSEG data showed.

“As investors get to grips with India’s growth outlook and the growth adjusted valuations, helped further by the monetary easing environment, it will spur foreign investors to come back,” Citigroup Asia ECM origination head Udhay Furtado said.

“That pivot to India growth is a staggered rotation. That’s why it’s not been a flood. I think you’ll see that change with the names that are coming to market in the next 18 months as they are going to be globally impactful.”

While Hong Kong’s IPO market remains at a low, the Hang Seng’s almost 9% rise in the past three months is seen as a positive to encourage more public market debuts in the coming months.

“While global investors remain cautious towards Hong Kong and China there is improved sentiment on the back of ongoing policy support and strong corporate earnings,” Sunil Dhuphelia, JPMorgan’s co-head of Asia ECM, ex-Japan, said.

“This has led to global investors reducing underweight positions in the past couple of months,” he said, referring to the two markets.

The China Securities Regulatory Commission (CSRC) has approved applications from 76 IPO hopefuls so far this year to list offshore, compared to 80 for all of 2023, according to the regulator’s website.

Some Chinese companies, however, still find the process of gaining approval uncertain and volatile markets means some do not go ahead with launching a deal, bankers said.

“If the broader market valuation increases, you will see a lot more follow-on deals and blocks in Hong Kong from China – that will come first,” Selina Cheung, UBS’ co-head of Asia equity capital markets, said.

“Hopefully we are on the right upward trend with the right policy supports. When the market is sufficiently strong, hopefully, the CSRC will have a relaxation towards approving IPOs.”


  • Reuters with additional editing by Jim Pollard


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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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