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Digital payments provider Pine Labs, backed by Peak XV Partners and Mastercard Inc., is considering raising about $1 billion in an IPO | Photo: Bloomberg
By Baiju Kalesh and Julia Fioretti
International companies are seizing on the strength of India’s stock market to offload stakes in local subsidiaries to investors wanting to get in on the action.
About $15 billion has been raised in secondary sales or block trades in India this year, a more than 150 per cent surge from the same period in 2023, data compiled by Bloomberg show. That’s already higher than any previous annual tally. And over $5 billion has been raised in initial public offerings, double a year earlier.
There’s more to come too, including Hyundai Motor India Ltd.’s likely record-breaking IPO expected in September or October. That might bring in as much as $3.5 billion, people familiar with the matter have told Bloomberg News.
“We’ve not seen such a large combined volume of transactions in such a short period,” said Ganeshan Murugaiyan, head of corporate coverage and advisory at BNP Paribas India. “The size per transaction, as well as the frequency, has increased with several deals bunched up” and all receiving quality demand.
Among block trades, Vodafone Group Plc subsidiaries raised about $1.8 billion by selling shares in India’s Indus Towers Ltd. in June, while British American Tobacco Plc. sold part of its stake in India’s ITC Ltd. for about $2 billion.
Ganeshan expects the trend to continue given the liquidity from domestic institutions and foreign investors coming in after federal elections in June.
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On the IPO front, in addition to Hyundai India’s effort, Hillhouse Investment is working with advisers for a possible listing of the Indian unit of Versuni Group NV, formerly Philips Domestic Appliances, to raise about $200 million.
“You need some size, scale and willingness of the parent to have a separate listed Indian company,” said Amit Thawani, managing director and head of investment banking at Nomura India. “Are there more companies considering this route? The answer is ‘yes’.”
“Multinational companies are not going to let go of this listing opportunity in India,” said Gaurav Sood, managing director and head of equity capital markets at Avendus Capital. “I expect a few names from Europe and Japanese automakers to look at listing their units.”
Some Indian technology companies are also returning home to list. Digital payments provider Pine Labs, backed by Peak XV Partners and Mastercard Inc., is considering raising about $1 billion in an IPO, Bloomberg has reported.
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Indian retail investors aren’t missing out either – they’ve been plowing money into the nation’s equity mutual funds for 40 months in a row.
“The mutual fund industry needs to maintain its momentum so that India remains an attractive destination for multinational companies to list their Indian counterparts,” Sood said.
First Published: Jul 18 2024 | 8:12 AM IST
