Hyundai Effect?…India IPO Market Surpasses China to Become Asia's No. 1

310 Companies Listed on Indian Stock Market This Year, Raising $18 Billion
Number of Listings Ranks 1st Globally, Total Fundraising Ranks 2nd

India, where new company listings surged due to this year's stock market rally, has overtaken China to become the largest initial public offering (IPO) market in Asia.

According to financial information firm Dealogic on the 26th, the Indian stock market has seen 310 companies listed (including secondary listings) raising a total of $18 billion as of the 12th of this year, ranking first in Asia and second worldwide. The number of IPOs exceeded that of the United States (226 companies) by more than 80, but the total market capitalization was far below that of the U.S. ($42 billion).

Reuters Yonhap News

This year, China's IPO market in Asia showed a marked weakness. This is due to the economic downturn and strengthened IPO regulations by Chinese authorities. China, which last year dominated the world’s largest IPO market by listing 239 companies and raising $48 billion (approximately 70 trillion KRW), saw its IPO market value plunge by about 86% compared to the previous year, falling behind not only the U.S. and India but also Hong Kong.

In contrast, India saw a series of major IPOs. A representative example is the listing of Hyundai Motor Company's Indian subsidiary on the Indian stock market, which was Asia's largest IPO this year. Hyundai’s Indian stock market listing in October, with a total public offering amount of $3.3 billion (approximately 4.5 trillion KRW), was recorded as the largest IPO in Indian history. V. Jayasankar, Managing Director of Kotak Investment Bank, which participated in Hyundai’s listing, said, "2024 was one of the busiest periods in the history of the Indian capital market," adding, "India is definitely attracting attention. China will need to make more efforts to continuously attract such business."

Hyundai Motor India, which was listed on the National Stock Exchange of India (NSE) last October. EPA Yonhap News

However, it is uncertain whether this growth trend in the Indian IPO market will continue. Although India secured the top spot in Asia this year thanks to the spin-offs of multinational companies like Hyundai, there is no guarantee that such large IPOs will continue to appear. A banker in Mumbai analyzed, "While the number of (Indian IPO) transactions has clearly increased, the average amount per transaction has decreased by about 75-80% over the past two years," adding, "This indicates that companies are trying to cash out as quickly as possible when market conditions are even slightly favorable."

The weak performance of Indian companies and the third-quarter gross domestic product (GDP) growth rate falling to 5.4%, the lowest in over two years, also fuel pessimism. According to the National Stock Exchange of India (NSE), approximately $11 billion (about 16 trillion KRW) was withdrawn from the Indian stock market in October, marking the largest monthly outflow on record.

There is also analysis that even if the Indian IPO market remains strong, the relative growth may be overshadowed if IPO markets in other regions rebound significantly. Gareth McCartney, Global Co-Head of Equity Capital Markets at UBS, explained, "IPO market activity worldwide is expected to normalize in 2025, with trading volumes particularly increasing in the U.S. and Europe," adding, "However, it would not be surprising if India continues to grow."

In the market, there is also an assessment that as China’s IPO market shrinks, mainland companies seeking overseas funding will turn to Hong Kong, which has become the second-largest IPO market in Asia. Frank Bee, Head of Asia Corporate Transactions at law firm Ashurst, stated, "For Chinese companies pursuing IPOs, the Hong Kong stock market offers the best venue with simplified listing procedures, market stability and transparency, and access to global capital." Hong Kong’s IPO scale, which remained at $6 billion last year, grew by 66% this year, surpassing $10 billion.

This content was produced with the assistance of AI translation services.