Investments

Indian Public Listings Fall $2.7B YOY

india-ipos-nse

Initial public offerings (IPOs) in India during 2019 have dropped to a four-year low as the Southeast Asian country’s economy cools, according to Reuters. Analysts anticipate additional government reforms in 2020 could help improve stock markets, however.

According to data from Refinitiv, funds secured through Indian IPOs dropped to $2.8 billion in 2019. IPO value was at $11.7 billion in 2017 prior to a notable fall to just $5.5 billion in 2018.

“2019 has been the worst year from an IPO market perspective,” said Sandip Khetan, a partner at consultancy EY. “Because of different types of disruptions, such as corporate failures and bankruptcies, things have slowed down considerably,” he said.

IPO proceeds this year lost half their value, with key industrial and financial sectors ahead of a striking diminishment.

On Sept. 19, India’s NSE Nifty 50 index .NSEI diminished 1.4 percent for the year. This was only a day before Indian markets were boosted via an official announcement of a cut in the corporate tax rate. More government reforms could help the struggling economy.

As of this past Tuesday’s close, the NSE index was up 12.4% overall in 2019.

“The government has addressed a lot of economic reform requirements in the last three months,” said EY’s Khetan.

A number of Indian IPOs this year have actually performed well, however, increasing potential for more issues in 2020: Shares of Indian Railway Catering and Tourism Corp Ltd (INIR.NS), marketing and advertising firm Affle (India) (AFFL.NS), and eCommerce company Indiamart Intermesh (INMR.NS) all have doubled in value from their IPO prices.

The S&P BSE IPO index .BSEIPO, measuring the overall performance of companies on the Bombay Stock Exchange after the completion of their IPOs, has grown 34 percent this year, outpacing broader indexes like the NSE Nifty 50 and BSE Sensex .BSESN.

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