India roars ahead of China to top Asian IPO rankings

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India overtook China as Asia’s top market for company listings this year, as buoyant initial public offerings boosted stock prices.

Powered by companies including Swiggy and Hyundai Motors, India According to Dealogic data in 2024 will be the world’s second largest equity fundraising market after the US for the first time. India’s National Stock Exchange continues to be number one ahead of Nasdaq for primary listings by value and the Hong Kong Stock Exchange, KPMG figures show.

The ranking heralds a shift in Asian finance in 2024, as tightening regulations lead to a relative listing drought in China. Meanwhile, companies rushed to take advantage of higher valuations after a multi-year rally in Indian equities, despite concerns over whether the market could weather an economic slowdown.

“It was one of the busiest periods in the history of the Indian capital market,” said V Jaishankar, managing director of Kotak Investment Banking, which worked on some of the country’s biggest IPO This year “India is definitely going to be targeted – China will probably have to do a lot more to attract that business consistently.”

The market has been buoyed by “very strong” Indian inflows for a significant “democratization of investment” as households increasingly pour money into local equity markets, Jaishankar added. “The overall activity took us by a positive surprise.”

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

Analysts say a weak the economy The pipeline of Chinese companies seeking to enter the public market has been held up with limited controls on company listings, although the announcement of fiscal and fiscal stimulus plans in September helped stabilize the market after a sell-off earlier in the year.

The slowdown in China’s IPOs was in line with Beijing’s policy goals, said Scarlett Liu, derivatives strategist at APAC Equity and BNP Paribas.

“This is a regulatory effort to achieve a balance between the primary and secondary markets,” he said, adding that authorities are concerned that too many listings could exclude activity from secondary market trading.

Hong Kong, China’s offshore financial hub, has seen equity-raising activity rise relative to $6 billion in 2023 to $10 billion by December, with some large deals such as electronics maker Media raising more than $4 billion in secondary listings.

Analysts say Hong Kong will benefit as a listing location for mainland Chinese companies to raise offshore capital.

“For Chinese companies pursuing an IPO, the Hong Kong stock exchange remains a leading venue, offering a more streamlined listing process, market stability and transparency, and greater access to global capital,” said Frank B, corporate transaction partner at law firm and Asian practice head Ashurst.

India, which has a large volume of relatively small deals due in 2024, has been buoyed by companies seeking to raise funds while valuations have skyrocketed, including spin-offs of Indian units of multinationals such as Hyundai.

“Of course the number of transactions has increased but the average ticket size per transaction has come down by about 75-80 per cent in the last two years,” said a Mumbai-based banker. “Now, that tells me what [companies are thinking] ‘Run for the hills, we try to make money as quickly as possible while market conditions are supportive’.

But growing rapidly as the most populous country in the world As the slowdown, weak corporate earnings reports and GDP growth fell sharply to 5.4 percent in the third quarter — the lowest rate in nearly two years — foreign portfolio managers have become wary of its frothy equity markets.

they pulled Over $11 billion Out of Indian stocks in October, a record monthly outflow, as well as another $2.5 billion in November.

However, bankers feel that the broad buoyancy in India’s primary and secondary listings is likely to persist into the new year. “Not to comment on the quality of the offers,” said a second banker in Mumbai, “as long as the market is supportive and there is liquidity there is enough activity.”

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

Global investment bankers also remain bullish on India, while warning that its relative growth could be eclipsed by a broader rebound in the US and elsewhere.

“Globally we expect IPO market activity to normalize in 2025 and we will see a pick-up in volumes, particularly in the US and Europe and possibly beyond China. It wouldn’t surprise me if India continues to grow though,” said Gareth McCartney, Global Co-Head of Equity Capital Markets at UBS.