India roars ahead of China to top Asian IPO rankings

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India has overtaken China as Asia’s top market for company listings this year as high share prices fuel a boom in initial public offerings.

By mobility companies including Swiggy and Hyundai Motor, India According to Dealogic, it will be the world’s second-largest equity fund-raising market for the first time after the US. India’s national stock exchange will top the list by value, overtaking Nasdaq and Hong Kong’s KPMG the numbers show.

The rankings signal a shift in Asian finance in 2024 as tightening regulations lead to a relative drought of listings in China. Meanwhile, companies have rushed to take advantage of high valuations after a multi-year rally in Indian stocks, despite concerns about whether the market can withstand an economic slowdown.

“This has been one of the busiest times in the history of Indian capital markets,” said V Jayasankar, managing director at Kotak Investment Banking, which has worked on some of the country’s biggest. IPOs this year. “India certainly attracts attention. China probably needs to do a lot more to attract that business really consistently.”

The market has been buoyed by “very strong” inward flows from India, thanks to significant “democratization of investment” as households pour more money into local capital markets, Jayasankar added. “The overall activity has been a positive surprise for us.”

The value of primary and secondary listings in mainland China, the world’s largest market in 2023, fell nearly 86 percent from more than $48 billion to $7.5 billion in early December 2024, according to Dealogic.

Analysts said weaker home Restrictive regulations on company listings have halted the pipeline of Chinese companies seeking access to public markets, although the announcement of monetary and fiscal stimulus plans in September helped stabilize markets after a selloff earlier in the year.

China’s IPO slowdown was in line with Beijing’s policy objectives, according to BNP Paribas Apac equities and derivatives strategist Scarlett Liu.

“It’s a regulatory attempt to strike a balance between the primary and secondary markets,” he said, adding that authorities are concerned that too many listings could take away activity from secondary market trading.

Hong Kong, China’s offshore financial hub, saw a relative increase in capital-raising activity to more than $10 billion in December from $6 billion in 2023, including some big deals such as electronics maker Midea, which raised more than $4 billion in a secondary listing.

Analysts say Hong Kong will continue to gain as a listing location for mainland Chinese companies to attract offshore capital.

“For Chinese companies pursuing IPOs, the Hong Kong stock exchange continues to be a leading destination, offering a more streamlined listing process, market stability and transparency, and greater access to global capital,” said Frank Bi, partner and Head of Corporate Transactions at Asian practice firm Ashurst.

India, which had a relatively smaller volume of deals in 2024, has attracted interest from companies looking to raise funds while valuations remain high, including the Indian units of multinationals such as Hyundai.

“Obviously, the number of transactions has gone up, but the average ticket size per transaction has come down by about 75-80 percent in the last two years,” says a Mumbai-based banker [companies are thinking] “Run for the hills, let’s try to cash in as fast as we can, while the market conditions are supportive.”

But as the world’s most populous nation’s rapid growth slowing, with corporates reporting weak earnings and GDP growth falling sharply to 5.4 percent in the third quarter, the slowest in nearly two years, foreign portfolio managers have been wary of a bubbling equity market.

They pulled more than $11 billion out of Indian stocks in October, a record monthly outflow, and another $2.5 billion in November.

However, bankers believe that the broader growth in primary and secondary listings in India is likely to persist into the new year. there is.”

“It’s fair to say that in the first two quarters of 2025 there will be no change from where we are now,” he added.

Global investment bankers also remain bullish on India, while cautioning that its relative growth could be eclipsed by larger returns in the US and elsewhere.

“Globally, we expect the IPO market activity to settle in 2025 and we will see volumes increase especially in the US and Europe and possibly outside of China. I would not be surprised if India continues to grow,” he said Gareth McCartney, global co-head of equity capital markets at UBS.