India, South Korea and Japan to stay busy with IPOs while China stalls

AFTER the worst quarter in five years for Asia-Pacific initial public offerings (IPOs), a pick up activity is expected from South Korea, India and Japan while Chinese deals are likely to remain sparse.

New share sales across the region fell to US$11 billion between January and March, the lowest tally for a quarter since early 2019, data compiled by Bloomberg show. The amount represents a 46 per cent drop from the same period last year.

While IPOs returned to major venues in Europe and the US, the slowdown in Asia was mostly due to Beijing’s decision to ramp up scrutiny of domestic new share sales as it tries to boost confidence in its equities market. Large deals in Hong Kong also vanished amid concerns about to China’s economy. The city has not hosted an offering larger than US$1 billion since October 2022.

Syngenta Group withdrew its long-delayed application for a US$9 billion IPO in Shanghai last week, another blow to China’s equity markets after Alibaba Group Holding scrapped the listing of its logistics arm.

Elsewhere in the region, new share sales set to raise several hundred million US dollars are surfacing. In South Korea, marine services company HD Hyundai Marine Solution and one shareholder are seeking as much as 742 billion won (S$744 million) this month. Even priced at the bottom of range, it would the largest IPO in Seoul since early 2022.

India has hosted a flurry of tiny deals since the start of January, drawing scrutiny from regulators during the past month. With demand for equities in the country remaining high, offerings bigger than US$100 million are expected to be taken to the market.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

A shareholder of telecom service provider Bharti Hexacom is this week set to start selling shares in the company that may raise as much as 42.8 billion rupees (S$692 million). The pipeline of expected large deals in Mumbai also includes a potential US$1 billion offering by Bajaj Housing Finance.

In Japan, a 70 per cent surge in shares of discount-store chain operator Trial Holdings since its listing on Mar 21 could boost sentiment for other newcomers as improving shareholder returns and corporate profits revive optimism in the local market. It is 38.85 billion yen (S$346 million) IPO was the largest in Tokyo since October.

In Hong Kong, meanwhile, the drought in what is traditionally been one of the world’s busiest listing venues will probably continue as Chinese firms stay on the sidelines following the scrapping of Syngenta’s and Alibaba’s proposed deals. BLOOMBERG