Investor rush for India exposure revs up block deals, IPOs

Business Times

2 days ago

[NEW DELHI] India's market for share sales is warming up after several dull months, as companies and shareholders cash in on a buoyant stock market.
The South Asian nation saw US$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 US$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 US$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. '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.
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Some of the largest recent block trades include British American Tobacco's US$1.5 billion sale of tobacco manufacturer ITC's shares, Singapore Telecommunications' US$1.5 billion selldown of wireless carrier Bharti Airtel's stock and billionaire Rakesh Gangwal's US$1.4 billion disposal of shares in IndiGo's parent company. Private equity firm Carlyle Group and South Korean automaker Hyundai Motor were also among those paring their India holdings.
The flurry of activity with blocks appears to be spilling over to IPOs. HDB Financial Services recently secured a nod from the securities regulator for a first-time sale that could raise US$1.5 billion. Prudential's Indian asset management venture is also nearing a filing for a listing expected to fetch as much as US$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 South-east Asia.
'The second half will be better,' he said.
Despite the recovery, Indian deals remain well below last year's US$66 billion record. Total share sales – including IPOs, placements and blocks – have raised US$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 this week said its IPO was looking to raise US$162 million, lower than what it targeted last year.
'In the last six months, we have passed on several IPOs largely on valuation grounds, even though we liked the businesses,' said Vikas Pershad, Asian equities portfolio manager at London-based asset manager M&G Investments. 'On balance, our patience has helped and in some instances, we've eventually become shareholders in names we initially passed over – and at better levels.'
Still, India's share-sale proceeds this year are likely to surpass last year's levels at the current pace, according to Goldman's Khaitan. The pipeline is particularly strong in consumer technology and financial services, where 'growth stories are resonating with both domestic and global institutional investors,' he said. BLOOMBERG