Chinese companies lead the global IPO chart

Unlike in India, the Asian IPO (initial public offering) market is in fine fettle. Asian companies accounted for around 60 per cent of the new issues last fiscal, raising $101 billion. Over 50 per cent of this money, in turn, was raked in by Chinese companies.

The tally for new issues in 2014-15 was 1,324 new companies, which raised $233 billion, up 10 per cent from what was mobilised in 2013-14.

Last year’s $25-billion IPO by e-commerce giant Alibaba has turned out to be the largest public offering yet. It has paid off for investors too, with a 24 per cent gain till date. Another big IPO by Guosen Securities, a brokerage and investment banking firm, has turned out even better, trading at over five times the offer price.

Even as 179 Chinese companies, double that in 2013-14, debuted on the bourses in 2014-15, other countries — Japan, Australia and Vietnam from the Asia-Pacific region — also showed a surge in new company listings. As the local economy slows, Chinese companies have been raising funds through public offerings as they expand operations outside the country.

In contrast, the Indian IPO market hasn’t shown the same buoyancy. Forty-three Indian companies came out with IPOs in 2014-15 compared with 39 the previous year.

But the amounts they raised were small and a large number of them were listed on the SME platforms that are restricted to high-net-worth investors rather than on the Main Board, where retail investors participate.

The Adlabs Entertainment IPO, the largest by an Indian company last year, raked in $61 million (₹375 crore). This pales in comparison with IPOs by many Asian companies. Closely following China is the US, which saw 173 listings by home-grown companies in 2014-15, raising $39 billion. But this was a sharp fall in fund-raising from 2013-14 when the US occupied the top spot in global IPO activity.

The biggest public offering by a US company, Citizen Financial Group, raked in $3.5 billion. The stock of the company is up 19 per cent since it listed.

Another region with plenty of IPO action in 2014-15 was Europe. Twenty per cent of the global IPOs was by European companies, which accounted for about 30 per cent of the total capital raised. The $4.8-billion public offer by Aena SA, the Spanish airport operator, was the largest. The stock has appreciated 56 per cent since listing.

Classification on the basis of economic activity shows that companies from the financial sector made the bulk of the IPOs in 2014-15, as was the case in earlier years.

Globally, one-fifth of the IPOs in terms of count and 30 per cent in terms of value came from the sector. The $6-billion National Commercial Bank IPO, the largest, has delivered a return of 47 per cent till date, against the sector average of 26 per cent.

In a break from the past, the communications sector (internet, telecommunications, media and advertising) mobilised large sums to emerge the second biggest IPO fund raiser in 2014-15. Helped by the Alibaba IPO, the sector raised $40 billion in 2014-15, more than double that it raised in the previous year.

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