India leads Asia’s IPO rankings ahead of China.

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India has overtaken China as Asia’s top market for companies this year, as volatile stock prices have surged in initial public offerings.

Pushed by companies including Swiggy and Hyundai Motor; India According to data obtained by Dealogic, it will be the second largest equity fundraising market in the world after the US by 2024. India’s National Stock Exchange is set to overtake Nasdaq as the number one spot for primary listings. and the Hong Kong Stock Exchange, KPMG figures show.

The rating is 2024 will herald a change in Asian finance, as tightening regulations lead to a relative drought in China. Meanwhile, companies rushed to take advantage of the multi-year rally in Indian stocks despite fears that the market could face an economic slowdown.

“It’s one of the busiest times in the history of India’s capital markets,” said V Jayasankar, managing director at Kotak Investment Banking, who has worked on some of the country’s biggest deals. IPOs This year. India is certainly being noticed – China probably needs to do a lot more to attract that business permanently.

The market was bought “very strongly” by India’s domestic flows thanks to greater “democracy of investment” with households pouring money into local equity markets, Jayasankar added. The whole move left us pleasantly surprised.

In the year The value of primary and secondary listings in mainland China, the world’s largest market in 2023, is expected to drop nearly 86 percent from more than $48 billion to $7.5 billion in early December 2024, Dialogic reported.

Analysts said it was weak Economy While the announcement of monetary and fiscal stimulus plans in September helped stabilize markets after the selloff earlier in the year, coupled with restrictive regulations on company listings, has increased the pipeline of Chinese companies seeking to enter the public markets.

China’s IPO slowdown was consistent with Beijing’s policy objectives, said Scarlett Liu, Apac equity and derivative strategist at BNP Paribas.

“It’s a regulatory attempt to strike a balance between the primary and secondary markets,” she said, adding that officials are concerned that too many listings could discourage secondary market trading.

Hong Kong, China’s offshore financial hub, saw more than $10 billion in equity-raising activity in December, up from $6 billion in 2023, with some of the biggest deals, such as electronics maker Media, raising more than $4 billion in secondary listings.

Analysts say Hong Kong will continue to be used as a listing location for major Chinese companies to raise offshore capital.

“For Chinese companies pursuing IPOs, the Hong Kong stock exchange remains a top destination, offering a more streamlined listing process, market stability and transparency, and greater access to global capital,” said Frank Bi, partner and head of the Asia practice at Law Corporate Transactions. Steadfast Ashurst.

In the year India, which has relatively few deals in 2024, has been bought by companies looking to raise funds, including divesting Indian multinationals such as Hyundai.

A Mumbai-based banker said, “Of course the volume of transactions has increased but the average ticket size of transactions has come down by 75-80 per cent in the last two years. Now, that tells me[companies are thinking]’Run for the hills, let’s try to make money as fast as we can, when market conditions are supportive’.

But as the world’s most populous country, the rapid growth With sluggish, corporates reporting weak earnings and GDP growth slowing to 5.4 percent in the third quarter — the slowest rate in two years — foreign portfolio managers have been wary of equity markets.

They pulled it. More than 11 billion dollars Out of Indian stocks in October, a record monthly exodus, as well as an additional $2.5 billion in November.

However, bankers think that the widespread euphoria in India’s primary and secondary listings may continue into the new year. “Not to comment on the quality of the supply but as long as the markets are supportive and there is sufficient liquidity,” said a second banker in Mumbai.

“It’s fair to say that the first two quarters of 2025 will see no change from where we are now,” he added.

Global investment banks also remain bullish on India, warning that its relative growth could be overshadowed by sharp returns in the US and elsewhere.

“Globally, we expect IPO market activity to normalize in 2025 and we will see more take-up, particularly in the US and Europe and perhaps outside of China. Although I would not be surprised if India continues to grow,” said Gareth McCartney, global head of equity capital markets at UBS.