IPOs in India could raise $20B next year: Citigroup
What's the story
Citigroup has projected that initial publicofferings (IPOs) in India could raise as much as $20 billion over the next year. This would further establish India as one of the world's busiest listing markets. The prediction comes on the back of a strong performance by domestic capital, including retail investors, and a number of high-profile companies planning their IPOs.
Market momentum
'India likely to be world's most active ECM market'
So far this year, IPOs in India have raised $12 billion. An additional $5 billion is expected to be added this month, thanks to the listings of Tata Capital Ltd. and LG Electronics Inc.'s Indian arm, both of which start trading next week. Harish Raman, Citi's head of equity capital markets execution and solutions for Asia Pacific, said, "India is likely to be the world's most active ECM market along with Hong Kong over the next year."
Sectoral diversity
Record IPO pipeline across sectors
Raman also noted that the current IPO pipeline is the largest on record, spanning domestic and international companies across various industries. He specifically highlighted technology, healthcare, and consumer sectors as key drivers of this growth. The surge in India's IPO market can be attributed to a strong domestic capital base, including millions of retail investors.
Capital shift
Foreign sell-off and its implications
Despite foreign investors pulling out over $15 billion this year amid a shift toward Chinese equities, India's IPO market remains resilient. Concerns over a 50% US tariff on India's exports and weaker corporate profits have also contributed to the foreign sell-off. Upcoming Indian listings include digital payments firm Pine Labs Ltd., e-commerce platform Meesho, and mutual fund manager ICICI Prudential Asset Management Co.
Future prospects
Challenges ahead for India
Next year, India's largest-ever IPO could be from wireless carrier Reliance Jio Infocomm Ltd. Informal discussions with the banks have already started. The nine-year rally in India's Sensex index has further fueled the optimism around upcoming listings. However, Raman cautioned that "the bigger challenge for India is just the amount of supply that is coming," hinting at potential adjustments in valuation expectations due to the influx of new listings.