India remains one of the most active markets for IPOs globally, and is set to perform well this calendar year, said a new survey by Baker McKenzie, an international law firm.

Baker McKenzie's ‘Doing Business Globally Survey’ of Indian business leaders also revealed that despite the 2019 general elections, 56 per cent of Indian business leaders are more interested in overseas deal making in the coming 12 months than they were in the past year, while 11 per cent of the more than 200 surveyed are less interested. 33 per cent of business leaders have the same level of interest.

And while Indian businesses are primarily looking for M&A opportunities domestically (42 per cent), a quarter of respondents said the wider Asia Pacific region is their top target, with 16 per cent looking at North America.

This is a shift as North America has until recently been a firm favourite for Indian companies looking to buy abroad, less so Asia Pacific.

Pre-election boom

The capital raised year-to-date in 2018 is almost 400 per cent more than the amount raised in the same period in 2017. By mid-April last year, there were only 40 IPOs that raised $619 million, compared with more than $3 billion raised through 71 listings in 2018 so far.

If pipeline deals move forward for the rest of 2018, the total value of IPOs will be 34 per cent higher than the capital raised in 2017, although there is likely to be a slight drop in the number of deals completed.

Commenting on the IPO boom, Ashok Lalwani, Global Head of Baker McKenzie’s India Practice, said, “This strong demand for capital is probably our most accurate indicator of the confidence and strength of the Indian corporate sector today. There is a strong sentiment amongst the Indian clients we speak to that while reforms have taken time and there have been a few other hiccups, the business community is quite bullish on the direction of India”.

While the election will throw up some uncertainty, the new-found confidence means Indian businesses will continue to seek out opportunities to grow, particularly through investments in new and complementary technologies, he added.

Active sectors

Industrials and consumer goods and services are set to be the most active sectors in 2018, accounting for 50 per cent of the total number of IPOs during the year. In terms of capital raising, financials, industrials and real estate will continue to be “hot sectors” as the pipeline deals in these industries remain healthy.

Exchange listings

All Indian exchanges are set to have their best performing year for seven years with $12.4 billion set to be raised in 68 IPOs through dual listings on both Bombay Stock Exchange and National Stock Exchange. While listings solely on the Bombay Stock Exchange are set to raise almost $2.8 billion, the listing solely on the National Stock Exchange are set to raise $487 million, according to Baker McKenzie.

Related Topics
comment COMMENT NOW