India’s buzzing IPO market is gearing up for bigger debuts
At least three IPOs of more than US$1 billion each are in the pipeline
INDIAN companies are testing investors’ appetite for bigger initial public offerings after recent debuts raked in multifold gains.
At least three IPOs of more than US$1 billion each are in the pipeline, with SoftBank-backed food-delivery platform Swiggy, as well as Indian units of LG Electronics and Hyundai Motor planning to tap the market.
The IPO boom comes as India’s rapid economic expansion makes it a bright spot amid challenges facing peers such as China. Indian listings have already raised US$8.6 billion this year, more than each of the two preceding years, according to data compiled by Bloomberg. Locals have been putting record money into the market, with foreign investors also turning net buyers of Indian equities this year.
An expanding economy means a broader market for Indian companies to tap into, and therefore more capital-raising needs, said Deven Choksey, managing director at KR Choksey Shares & Securities. “This is not going to stop in a hurry. It’s fired up.”
Swiggy is considering filing for a US$1 billion-plus offering as soon as this week, people familiar with the matter said. LG Electronics has also picked banks for a potential listing of its Indian business that could raise as much as US$1.5 billion. Hyundai Motor is planning to sell shares in its local unit to raise as much as US$3.5 billion in what could be the biggest-ever listing in India, Bloomberg News reported in July.
The shares of companies that went public in India this year posted an average first-day gain of 30 per cent, compared with 22 per cent globally, data compiled by Bloomberg showed. The shares of Bajaj Housing Finance, the home-loan unit of India’s largest shadow lender, more than doubled on their debut on Monday (Sep 16).
Last month, electric-scooter maker Ola Electric Mobility’s IPO raised more than US$730 million, and baby-products retailer Brainbees Solutions garnered about US$500 million. The shares of both the companies are trading about 40 per cent above their issue prices.
Most of the 240 offerings in India this year raised under US$100 million. The booming market for small debuts has attracted scrutiny from the country’s market regulator, which issued warnings earlier this year of price manipulation in tiny IPOs. BLOOMBERG
Share with us your feedback on BT's products and services
