India’s IPO Surge: A Global Leader in 2024
For the second consecutive year, India has emerged as the world leader in Initial Public Offerings (IPOs), solidifying its status as the primary hub for IPO activity in the Asia-Pacific (APAC) region. With a remarkable 338 IPO deals in 2024, representing a 44% increase from the previous year, India has not only outpaced its competitors but has also demonstrated a significant rise in IPO proceeds, which soared from US$7.9 billion in 2023 to an impressive US$20.99 billion in 2024. Only the United States recorded higher IPO proceeds during this period.
Landmark IPOs and Market Maturity
A standout example of India’s burgeoning IPO market is the recent listing of Hyundai’s Indian subsidiary, which raised US$3.3 billion. This IPO not only ranks as the second-largest globally but also marks the largest-ever IPO in India. Such monumental listings were once reliant on foreign stock exchanges for capital, but the evolution of India’s stock exchanges now allows them to support substantial IPOs, showcasing their growing depth and sophistication.
The successful IPOs of other large-cap companies, such as Swiggy, which raised nearly US$1.4 billion, and NTPC Green Energy, which garnered US$1.18 billion, further illustrate the market’s capacity to handle significant financial transactions. This momentum is expected to continue into 2025, with a pipeline of large IPOs on the horizon.
Economic Fundamentals Driving Growth
The robust performance of India’s IPO market is underpinned by strong economic fundamentals. The Organization for Economic Cooperation and Development (OECD) projects a GDP growth of approximately 6.8% for the 2024-2025 fiscal year, with expectations of sustained growth into 2027. Additionally, the rapid expansion of the domestic retail investor base has played a crucial role in this growth. With household investments in local equity markets surging, Indian mutual funds experienced triple-digit inflows in 2024, enhancing the liquidity available for new listings.
This influx of capital has enabled India to support large IPOs, attracting companies that previously sought listings abroad. The increasing number of IPOs exceeding US$1 billion indicates a shift, as Indian technology firms, once listed in the US or Europe, may now consider returning to a more mature and liquid Indian market.
Mixed Results in the APAC Region
While India thrived, IPO activity across other major APAC jurisdictions presented a mixed picture. Overall, APAC IPO proceeds fell to US$51.59 billion in 2024 from US$73.49 billion in 2023, with the total IPO count decreasing from 939 to 875. This decline was primarily driven by a significant drop in IPO proceeds in mainland China, although Hong Kong experienced a slight increase in IPO issuances.
Indonesia, too, faced challenges, with IPO proceeds plummeting from US$3.54 billion in 2023 to just US$895 million in 2024. The upcoming elections and high interest rates in the US contributed to a cautious approach among issuers and investors.
China’s Year of Adjustment
China’s IPO landscape saw a marked slowdown in 2024, largely due to stricter IPO regulations and ongoing economic challenges stemming from a liquidity crisis in its real estate sector. IPO proceeds on mainland exchanges fell dramatically from US$45.92 billion in 2023 to US$8.62 billion in 2024. Conversely, Hong Kong maintained steady IPO activity, attracting many Chinese issuers seeking alternative listing venues.
Despite the muted performance in 2024, there are signs of optimism for 2025. Recent successful IPOs, such as those from Chinese bubble tea maker Mixue and electric vehicle manufacturer BYD, suggest a potential rebound in Hong Kong’s IPO market.
The Promise of Indonesia
Looking ahead, there is cautious optimism for Indonesia’s IPO market in 2025. After a challenging year marked by political transitions and economic uncertainties, the country’s strong economic fundamentals position it as an attractive growth market. With a youthful population and a diversifying economy, Indonesia is poised for a resurgence in IPO activity.
The establishment of a new sovereign investment vehicle, Danantara, which will manage over US$60 billion in state assets, could significantly impact Indonesia’s capital markets. This initiative aims to enhance value creation for state-owned enterprises and attract third-party investments, making it a focal point for investors in the coming year.
Conclusion
India’s remarkable IPO performance in 2024 underscores its emergence as a global leader in capital markets, driven by strong economic growth and a burgeoning retail investor base. While challenges persist in other APAC regions, the potential for recovery and growth remains, particularly in Indonesia and Hong Kong. As the landscape evolves, stakeholders will be keenly watching how these markets adapt and thrive in the coming years.