India is experiencing a significant increase in equity capital market (ECM) deals, including a notable $3 billion IPO from Hyundai Motor's unit, setting a new record for the country's share of global ECM deals this year. The scarcity of similar deals in other parts of Asia is expected to further attract capital into India's burgeoning market.
The global shift in capital flows towards India is partly due to higher interest rates worldwide, geopolitical tensions, and China's economic slowdown coupled with its restrictions on initial public offerings (IPOs) to bolster its secondary markets. This has resulted in a downturn in equity deal-making across Asia, positioning India as the world's second busiest market for ECM deals, trailing only the United States.
In the first quarter of 2024, Indian companies successfully raised $2.3 billion through IPOs, a staggering increase from the $166.5 million raised in the same period last year, according to LSEG data. This surge in activity has led to a 139% increase in total ECM deals, making India the most active market across the Asia Pacific region, including Japan, where activity decreased by 46.8%. India's global market share in ECM deals reached 10.05% in the first three months, marking a record high.
Rahul Saraf, Citigroup's India head of investment banking, highlighted the unprecedented level of activity and the emergence of billion-dollar-plus transactions, indicating the maturity and growing appeal of India's equity market. The National Stock Exchange of India has become the third most active listing venue globally, following the New York Stock Exchange and Nasdaq.
Among the significant upcoming deals, Hyundai Motor's India unit is set to conduct the country's largest ever IPO, aiming to raise up to $3 billion in 2024, which would value the automaker at up to $30 billion. Additionally, Vishal Mega Mart plans a $1 billion IPO, potentially valuing the company at $5 billion. The size and number of these deals are expected to increase post-election, according to Sumeet Singh, Aequitas Research director.
With India's general elections scheduled over almost seven weeks from April 19, Citigroup leads the league table for Indian ECM activity, outpacing Bank of America and ICICI Bank.
