India IPOs to surpass 2024 highs as billion-dollar issues ahead: JP Morgan

JPMorgan Chase expects initial public offerings in India this year to surpass the highs of 2024, with a number of billion-dollar issues lined up over the next few months, the Wall Street bank's head of capital markets said. 

Indian firms raised $20.5 billion via 91 public offerings in 2024, making the South Asian country the world's second-biggest IPO market in terms of funds raised after the US. 

This year looks set to top that number, driven by easing regulations and healthy equity valuations. Large Indian companies have already raised $8.2 billion through 49 IPOs till August this year. 

"We expect the last four months of the year to be very busy. 

We expect (the) number of IPOs as well as total proceeds to exceed 2024," Kevin Foley, global head of capital markets at JPMorgan, said in an interview in Mumbai. 

Public offerings worth nearly $13 billion have been approved by the regulator so far, with another $18.7 billion-worth of IPOs pending approval, according to data provided by PRIME Database, a primary market tracking firm. 

JPMorgan has raised close to $10.4 billion across 12 transactions, including three IPOs and secondary follow-on offers. "We expect that (IPO) number to go up to more than ten," Foley said.

Strong IPO pipeline

"IPO pipeline for the remaining part of the year is also very strong, with several large $1 billion-plus IPOs under works and an aggregate of $7-$10 billion of issuance expected before year-end," Foley said. 

Value creation remains a dominant theme, Foley said, as domestic shareholders, financial sponsors and global corporates capitalise on healthy valuation multiples in Indian markets. 

Over $42 billion in total equity capital, which includes both IPOs and secondary market sales, has been raised in the Indian markets so far this year. In 2024, that number stood at $74 billion. 

The already strong activity in the Indian equity capital markets is receiving a boost from regulatory changes aimed at speeding up IPO approvals and reducing public float requirements for large offerings. 

Public offerings from Indian units of foreign firms like LG Electronics, private equity-funded fintech firms Pine Labs and Groww, are among the issues likely to hit the market in the next few months. 

Employment hit greater than GDP hit 

However, while India's primary markets have been buoyant, foreign investors have sold a net of $15.7 billion in equities in the secondary market due to concerns over corporate earnings growth and the impact of punitive tariffs imposed by the US on India. 

The upto-50 per cent tariffs are likely to impact GDP growth moderately, but could hit employment more significantly, Jahangir Aziz, JPMorgan's head of emerging market economic research, said in a separate interview. 

"The employment shock is going to be significant," he said, adding that fiscal policy will need to step in to dull the impact on displaced workers. 

The Indian government is yet to announce a support package for impacted industries and workers, but has cut tax rates on a number of items to boost demand. 

The tax cuts are not the solution in the current scenario, Aziz said. "What you need is employment protection." India already has a system of targeting income transfers, which can be used to support workers, Aziz added.