India gears up for IPO month with listings worth $5 billion

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India is set for a busy month of initial public offerings after a slow start to the year, as companies benefit from a stock market rebound from initial turmoil from US President Donald Trump’s tariff threats.

Two of the year’s biggest IPOs will hit the markets this week, with Tata Capital’s $1.7 billion listing on Monday and LG Electronics’ $1.3 billion India start-up on Tuesday. In total, analysts expect about $5 billion from IPOs this month, with another $5 billion before the end of the year.

“India’s IPO pipeline is our busiest ever,” said Harish Raman, co-head of capital markets in Asia at Citigroup.

Stocks recovered from an unexpectedly slow start the following year Trump’s “Emancipation Day” definitions in April, and a brief military conflict with Pakistan in May raised concerns about the country’s economic growth.

Although 50 per cent tariffs on India remain in place – among the highest in the world – the market has largely shrugged off the threat, with the Nifty 50 stock index up 14 per cent from its April low.

Tata Capital shares opened 1.2 per cent higher on Monday morning before falling to just 0.4 per cent above the listing price.

Initial public offerings are on track to exceed last year’s record of $21 billion. Most of the activity was concentrated in October, with stable profits and recent government pledges to do so – Goods and services tax reform These investments “boosted overall confidence in the primary market,” said Pranav Haridasan, CEO of Axis Securities.

Other expected listings include the $1 billion debut of ICICI Prudential Asset Management, and Pine Labs, a digital payments company backed by PayPal and Temasek, that hopes to raise nearly $700 million.

WeWork India, which was sold by the US parent of Indian real estate group Embassy last year, raised more than $350 million this month.

George Chan, head of global IPOs at EY, said the rebound in activity in the second half was supported by strong valuation multiples and domestic investor demand.

“The rise in average deal size reflects growing investor optimism in sectors such as fintech, manufacturing and renewable energy,” he said in a report last week.

Domestic investors pumped a net $63.2 billion into the market this year, more than covering the $25.3 billion in net outflows from foreign holdings, according to data from Groww, one of India’s largest online trading platforms.

Mutual funds have become a popular vehicle for retail investors, with households investing about $3 billion a month in funds through systematic investment plans, according to Yatin Singh, CEO of investment banking at global financial services firm Emkay.

Steady inflows, in turn, “provide strong support for fundraising activity,” said Kailash Soni, head of India capital markets at Goldman Sachs.

But the dominance of local funds prevented foreign investors from rushing into the IPO.

“Because the participation of domestic mutual funds is so heavy, the allocations become very limited,” said Rita Tahilramani, investment director for Asian equities at Aberdeen, adding that the allocations were “so slim that even if I make good money on that front, it doesn’t make sense.”

It also raised concerns about “extremely expensive” valuations that meant “there was nothing left on the table for the IPO investor.”

However, local funds are expected to continue to support the market, especially as the government restricts individual foreign investment by Indians to $250,000 annually.

“Indian investors don’t have the option of shopping around Asia for the best deal. Structurally, any money that comes in needs to be redistributed within India,” Singh said.