With Swiggy, LG India & Hyundai, India’s buzzing IPO market is gearing up for bigger debuts

Indian companies are testing investors appetite for bigger initial public offerings after recent debuts raked in multifold gains.

At least three IPOs of more than $1 billion each are in the pipeline, with SoftBank-backed food-delivery platform Swiggy Ltd., as well as Indian units of LG Electronics Inc. and Hyundai Motor Co. planning to tap the market.

The IPO boom comes as India’s rapid economic expansion makes it a bright spot amid challenges facing peers such as China. Indian listings have already raised $8.6 billion this year, more than each of the two preceding years, according to data compiled by Bloomberg. Locals have been putting record money into the market, with foreign investors also turning net buyers of Indian equities this year. 

An expanding economy means a broader market for Indian companies to tap into, and therefore more capital-raising needs, said Deven Choksey, managing director at KR Choksey Shares & Securities Pvt. “This is not going to stop in a hurry. It’s fired up.”

Swiggy is considering filing for a $1 billion-plus offering as soon as this week, people familiar with the matter said. LG Electronics has also picked banks for a potential listing of its Indian business that could raise as much as $1.5 billion. Hyundai Motor is planning to sell shares in its local unit to raise as much as $3.5 billion in what could be the biggest-ever listing in India, Bloomberg News reported in July.

The shares of companies that went public in India this year posted an average first-day gain of 30%, compared with 22% globally, data compiled by Bloomberg showed. The shares of Bajaj Housing Finance Ltd., the home-loan unit of India’s largest shadow lender, more than doubled on their debut on Monday. 

Last month, electric-scooter maker Ola Electric Mobility Ltd.’s IPO raised more than $730 million, and baby-products retailer Brainbees Solutions Ltd.’s garnered about $500 million. The shares of both the companies are trading about 40% above their issue prices. 

Most of the 240 offerings in India this year raised under $100 million. The booming market for small debuts has attracted scrutiny from the country’s market regulator, which issued warnings earlier this year of price manipulation in tiny IPOs.