By Scott Murdoch
SYDNEY (Reuters) – Dealmakers expect the momentum for new share sales in India, now the world’s busiest market for initial public offerings, and Australia in 2025 will cushion the impact of sluggish Chinese deals in the Asia Pacific.
The Mumbai-based National Stock Exchange outranked the bigger U.S. exchanges in the amounts raised by IPOs for the first time, driven by India’s robust economic growth and increasingly active domestic investors, following the rush of IPOs in 2024.
There was a 149% increase in the value of IPOs in India in the past year to $18.4 billion, according to LSEG data, which contributed to total equity capital market activity almost doubling.
The Indian exchange accounted for 16.8% of global market share for IPOs, outranking the New York Stock Exchange and Nasdaq, the data showed.
“Within emerging market portfolio countries, India is the bright spot,” said Peihao Huang, JPMorgan’s co-head of Asia Pacific equity capital markets.
“Our forecast is for 2025 to outperform 2024 based on the pipeline visibility, but that will to a certain degree depend on where the Fed rates will be, and where other markets within emerging markets perform, for example, (if there is) a strong China recovery,” Huang added.
Besides India, two major deals – HMC Capital’s A$2 billion ($1.25 billion) Digico REIT listing and fast food chain Guzman y Gomez’s A$335.1 million IPO – helped Australia’s dormant new share sale market record a 294% jump in year-on-year volume in 2024.
Despite being the largest Australian IPO for six years, data centre owner Digico saw its shares fall by up to 20% in the first two days of trading after plunging below the issue price in the first trading session last week.
“The recent disappointing performance of the latest batch of IPOs, excluding GYG, means that for future deals, there will need to be a reset on price expectations to meet investor demand,” said Ron Shamgar, head of Australian equities at TAMIM Asset Management.
However, a lack of major IPOs in the past three years before Digico and an increasing number of big companies being taken off the ASX has fuelled investor demand for new stocks, Macquarie’s co-head of Asia Pacific ECM Georgina Johnson said.
“Large transactions that are well supported and trade well in the after market will give vendors and listed investors confidence,” Johnson said, adding that private equity companies will be looking to IPOs in light of their depressed asset valuations in recent years.
