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India’s IPO Market Desperately Needs Some Mega Deals: ECM Watch

India may need a savior for its initial public offering market, with proceeds raised since January falling to a five-year low.

India’s IPO Market Desperately Needs Some Mega Deals: ECM Watch
A man looks at a screen displaying the Sensex on the facade of the Bombay Stock Exchange (BSE) building in Mumbai. Image used for representational purpose.

(Bloomberg) -- India may need a savior for its initial public offering market, with proceeds raised since January falling to a five-year low.

The eight companies that have listed in 2020 have raised just $7.3 million, according to data compiled by Bloomberg. Their deal size has been tiny -- $900,000 on average, with Hindprakash Industries Ltd.’s $1.6 million share sale being the largest. Their performance has also been far from stellar as their shares have climbed 1.8% on average, weighed by offer size, compared with a 5% advance in the MSCI India Small Cap Index through the last close.

India’s IPO Market Desperately Needs Some Mega Deals: ECM Watch

The coronavirus outbreak has thrown a spanner in IPO works in India, as investors grapple with the market uncertainty that comes with it, said Pranav Haldea, a managing director at Prime Database Group, a capital-market database provider. “Certain issuers have adopted a wait-and-watch approach to see if the budget announcement of Feb. 1 has any major impact on their business.”

On the bright side, a series of billion-dollar initial share sales are in the pipeline. The most high-profile deal is the privatization of state-run behemoth Life Insurance Corp. of India, which could fetch as much as 900 billion rupees ($12.6 billion). Then there’s Tower Infrastructure Trust, which filed for an IPO of as much as $3.5 billion, and SBI Cards and Payment Services Ltd., backed by State Bank of India and Carlyle Group, which is targeting a listing of about $1.3 billion.

UPCOMING LISTINGS:

  • Central Retail
    • Thailand stock exchange
    • Size $2.5b
    • Listing Feb. 20
    • Bualuang Securities, Phatra Securities, Credit Suisse, Morgan Stanley, UBS
  • Champ Resto Indonesia
    • Indonesia stock exchange
    • Size about $150m
    • Pre-marketing started Jan. 31
    • CLSA
  • Mr D.I.Y. Group
    • Bursa Malaysia
    • Size up to $500m
    • Pricing date TBD
    • CIMB, Maybank

More ECM situations we are following:

  • Warburg Pincus is meeting banks to manage an IPO of about $500 million for the Philippines’ Converge ICT Solutions, IFR reported, citing unidentified people with knowledge of the plan.
  • SBI Cards and Payment Services is targeting a launch in early March for its 90 billion rupee initial share sale, the Mint newspaper reported, citing two people aware of the development.
  • HKEX has approved the Shanghai listing of China Railway Construction’s spin-off unit.
  • Hygeia Healthcare Holdings, the largest oncology health-care group in China, has applied for a Hong Kong IPO.

SEE ALSO:

  • Asia ECM Weekly Agenda
  • IPO data
  • U.S. ECM Watch
  • EU ECM Watch
  • To receive the ECM Watch in your inbox daily, click the “subscribe” button at the top of this article

To contact the reporters on this story: Zhen Hao Toh in Singapore at ztoh4@bloomberg.net;Baiju Kalesh in Mumbai at bkalesh@bloomberg.net

To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Cecile Vannucci

©2020 Bloomberg L.P.