India is set to become the IPO hub of the world this year, usurping China from a position it has held for years.
Indian financial capital Mumbai saw more initial public offerings (IPOs) on its two indexes in 2023, than China’s three exchanges, according to a report by Nikkei Asia.
IPO’s on Mumbai’s National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) were on course to jump 45% compared to last year, the report said, citing data from Ernst & Young.
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Meanwhile, Chinese indexes saw double digit falls in the number of IPOs, the report added. The Shanghai Stock Exchange (SSE) led the fall with a 36% drop, while the Shenzhen Stock Exchange (SZSE) saw a 33% year-on-year drop in the number of IPOs.
The Hong Kong Stock Exchange also saw a 19% fall in IPOs, compared with last year.
The fall in the number of IPOs on Chinese exchanges has been driven not just by its geopolitical tensions with the West, but also a tightening regulatory structure for listings.
In August, Chinese regulators decided to restrict IPOs on the mainland to boost the secondary market. Earlier in the year, Beijing also stepped up scrutiny of offshore listings, leading to a large backlog of applicants.
India, meanwhile, is benefitting from a young demographic and investor confidence in the economy and increasing liquidity in the hands of domestic investors, analysts said.
The country is also emerging as an alternate destination for manufacturers looking to de-risk their supply chains from China.
Even so, Indian exchanges are still behind mainland Chinese counterparts in IPO proceeds, Nikkei Asia said.
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