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India Overtakes China as Asia's IPO King

India has officially dethroned China as Asia's top market for initial public offerings (IPOs) in 2024, fueled by a surge in company listings and buoyant stock market valuations, according to data from Dealogic and KPMG.

This shift, as reported by Financial Times, is attributed to a confluence of factors. Firstly, a wave of new listings in India has capitalized on high valuations driven by a multi-year rally in the Indian equity market. Secondly, China's IPO market has experienced a significant slowdown, attributed to tighter regulations and a weaker economy.

"It's been one of the busiest times in the history of Indian capital markets," says V Jayasankar, managing director at Kotak Investment Banking, to the Financial Times. "India is certainly getting noticed — China needs to probably do a lot more to really consistently attract that business."

Highlighting the scale of the shift, Dealogic data reveals that the value of primary and secondary listings in mainland China plummeted by approximately 86% in 2024, from over $48 billion in 2023 to just $7.5 billion by early December. This downturn is attributed to a combination of a weakened Chinese economy and restrictive regulations imposed on company listings.

Analysts suggest that Beijing's policy aims to achieve a balance between primary and secondary markets, stemming concerns that an influx of new listings could drain activity from secondary market trading.

In contrast, Hong Kong, China's offshore financial hub, witnessed a relative increase in equity fundraising activity, exceeding $10 billion by December, driven by significant transactions such as electronics maker Midea's $4 billion-plus secondary listing.

Analysts anticipate that Hong Kong will remain an attractive listing venue for mainland Chinese companies seeking to access offshore capital. "For Chinese companies pursuing IPOs, the Hong Kong Stock Exchange remains a top venue offering a more streamlined listing process, market stability and transparency, and greater access to global capital," explains Frank Bi, partner at law firm Ashurst, to the Financial Times.

India's IPO boom, characterized by a large volume of relatively smaller deals, is seen as a response to favorable market conditions and high valuations. However, concerns linger about the sustainability of this momentum, given the potential impact of a slowing global economy and the cautious stance of foreign portfolio managers.

Despite these uncertainties, bankers remain optimistic about India's IPO market in the near term. "Not to comment on the quality of the offerings, there is enough activity lined up so long as the markets are supportive and the liquidity is there," notes a Mumbai-based banker to the Financial Times. "Fair to say that the first two quarters of 2025 will see no change from where we are right now."

Global investment bankers share this cautious optimism, suggesting that while India's IPO market growth may be impressive, a broader global economic recovery could potentially overshadow its relative performance.