The volatile Indian stock market may have been hit harder than stock markets in the developed world during January but it hasn’t frightened companies that believe in its upside, judging on latest global IPO data.
The Indian market wide NIFTY index from the Indian Stock Exchange is down 15 per cent between 1 January and 15 February compared the ASX 300 being down 12 per cent and the US S&P down 8 per cent.
But IPOs in India are recovering faster than elsewhere, so fast that the dawning economic superpower could salvage and breathe new life in the global IPO market.
“It seems India is one country saving the ailing Global IPO market with US$3.3 billion worth of proceeds from eight deals, making it the largest IPO market in the world so far this year,” said Thomson Financial’s Deals Express report.
“The bulk of volumes came from the biggest IPO deal so far this year - Reliance Power’s US$3 billion IPO last January 21.”
Thomson Financial also noted, “India garnered 49.1 per cent of Global IPO proceeds compared to just 3.7 per cent in the same period last year. A feat considering the Global IPO decline of 36.1 per cent compared to the same period last year.”
This however just confirms how slow the IPO market is looking globally. “Taking off Reliance Power’s US$3 billion IPO - Global IPO decline must have gone down by 64 per cent. Both Top Two Largest IPO markets last year, China and US, experienced declines compared to the same period last year,” said Thomson Financial.
The news gets even better for investors willing to jump back into the subcontinent. “India still has a hefty IPO pipeline to come. In fact, this week, a total of three IPOs from India is set to launch. Emaar MGF’s IPO, estimated at US$1.6 billon will be the second largest IPO in the world so far this year, behind Reliance Power’s US$3 billion IPO.”
If India is bouncing back faster than anyone expected, then why is it still so hard for planners to invest into the country? Influential planners who attended the recent Financial Standard Chief Economists Forum said that encouraging their platforms to put Indian funds onto their platforms was so difficult they were considering to go direct instead.
As far as India is concerned, maybe it’s time for wealth management to catch up with the economic reality.
