A paucity of deals elsewhere in Asia will add to the impetus
for capital flows into India, they added.
Higher global interest rates, geopolitical tensions as well
as China's economic slowdown and its move to restrict initial public offerings
(IPOs) to support its secondary markets have led to a slump in equity
dealmaking across Asia.
India, on the other hand, has emerged as the second busiest
market in the world for equity capital market (ECM) deals after the United
States.
Indian companies raised $2.3 billion in the first quarter of
2024 in IPOs, according to LSEG data, up more than 12 times the $166.5 million
raised in the same period last year, the data showed.
Total ECM deals rose 139%, making it the most active market
across Asia Pacific, including Japan, where activity was down 46.8%, and
accounted for 10.05% of the global total in the first three months, a record
high.
"The pipeline and activity level has never been as big
or as busy. We are seeing many more billion dollar-plus transactions, it's
unbelievable," said Rahul Saraf, Citigroup's India head of investment
banking.
"India is really coming of age in the size, scale and
quality of issuers."
The National Stock Exchange, the country's largest bourse,
was the third most active listing venue globally in the first quarter, behind
the New York Stock Exchange and Nasdaq.
"If you look at global liquidity, where would a large
family office or global fund like to put money in the current environment? It’s
most likely between the US, India and Japan," said Saraf.
Among the large deals in the pipeline, the listing of South
Korean automaker Hyundai Motor’s India unit is on track to be the country’s
largest ever IPO as it aims to raise up to $3 billion in 2024 in a deal that
would value the car marker at up to $30 billion.
Budget supermarket chain Vishal Mega Mart is also planning a
$1 billion IPO that would value the company at up to $5 billion.
“In terms of upcoming deals … the size of the deals is
getting larger and more companies are lining up for listing later in the year,
once elections are out of the way,” said Sumeet Singh, Aequitas Research
director who publishes on Smartkarma.
India’s general elections will be held over almost seven
weeks from April 19.
Citigroup heads the league table for Indian ECM activity, according to LSEG, ahead of Bank of America and ICICI Bank. Reuters
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