‘I need exposure to India' mood revs up block trades, IPO plans

Economic Times

a day ago

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The South Asian nation saw $6.4 billion raised through share sales in May, the highest monthly total since December 2024, according to data compiled by Bloomberg. Block trades worth $5 billion were the biggest contributors, marking the busiest month for such deals since March last year. The momentum has carried into June, with at least 10 blocks raising $1.2 billion in the first week alone.Indian stocks are now positioned for more gains after the central bank on Friday delivered a bigger-than-expected interest rate cut and injected further liquidity into the banking system. This has supported a rally that's already underway, with the benchmark NSE Nifty 50 Index rebounding from its April lows, which were triggered by concerns over US President Donald Trump's broad tariffs.'Right now, investors are saying, 'I need exposure to India — and I need it fast,'' said Sunil Khaitan, a managing director leading financing in India at Goldman Sachs Group Inc. 'Block trades remain the quickest and most efficient way to get that exposure.'The recent torrent of deals stands in contrast to the lull earlier in 2025, when local deals cooled off after a record-breaking year. India even ceded its position to Hong Kong as the world's second-largest market for share sales in the first three months of the year, weighed down by an unexpected slowdown in economic growth and cautious corporate earnings forecasts.Some of the largest recent block trades include British American Tobacco Plc's $1.5 billion sale of tobacco manufacturer ITC Ltd.'s shares, Singapore Telecommunications Ltd.'s $1.5 billion selldown of wireless carrier Bharti Airtel Ltd.'s stock and billionaire Rakesh Gangwal's $1.4 billion disposal of shares in IndiGo's parent company. Private equity firm Carlyle Group and South Korean automaker Hyundai Motor Co. were also among those paring their India holdings.The flurry of activity with blocks appears to be spilling over to IPOs. HDB Financial Services Ltd. recently secured a nod from the securities regulator for a first-time sale that could raise $1.5 billion. Prudential Plc's Indian asset management venture is also nearing a filing for a listing expected to fetch as much as $1.2 billion, according to people familiar with the matter.Better-than-expected corporate earnings and decent economic growth provide a robust backdrop for deals, which could include billion-dollar IPOs later this year, said Samarth Jagnani, Morgan Stanley's head of global capital markets for India and Southeast Asia.'The second half will be better,' he said.Despite the recovery, Indian deals remain well below last year's $66 billion record. Total share sales — including IPOs, placements and blocks — have raised $15.5 billion so far this year, 29% lower from the year-ago period, according to Bloomberg-compiled data.Some IPOs are also moving ahead with tamer valuations: Solar-pump maker Oswal Pumps Ltd. this week said its IPO was looking to raise 13.9 billion rupees ($162 million), lower than what it targeted last year.