India Is Hot! New IPO’s Are Massively Oversubscribed

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CDE Op-Ed Commentary

A sign of the desire to get into the new Indian dynamic has manifested itself this past few days with the massive over-subscription of several Indian initial public offerings (IPOs) coming to market.

The DMart IPO closed at USD260 million and was oversubscribed by a multiple of 104. The Radio City IPO  was oversubscribed by a factor of three, and another four IPOs are due in India this month, excluding today’s listings of Laxmi Cotspin, Manas Properties, Maximus International and Octaware Technologies. 

This shows the gradual realization that the Indian consumer market is the place to be. 

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The interesting part of the DMart IPO and Radio City IPOs is the amount of latent capital that has not entered the Indian stock market due to over-subscription. The over-subscriptions on the DMART and Radio City offerings this week amount to USD30 billion – equivalent to 1.5% of India’s entire GDP. 

Clearly, there is investment capital waiting for good homes in India, and a domestic market with the capital to do so. 

The dynamic is similar to the China craze that began about 10 years ago. While the Indian IPO figures may still seem small in comparison with those achieved by Chinese conglomerates in Hong Kong today, it was only ten years ago that Chinese IPOs were listing at the same value as the DMart offering in India now.

India currently possesses a similar sized middle class consumer market to China today, which suggests that Indian stocks are probably undervalued right now.

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While China’s consumer market will start to overtake India’s due to various age demographics, the correlation between the boom that fueled massive Chinese growth from 2005 should not be underestimated in terms of its similarity to India’s position today. 

Furthermore, the rules for listing in India only require that a company should have shown a profit for the last three years. This is a time for Indian entrepreneurs to get stuck in, and ride what promises to be an exciting ten years in making India both an Asian consumer tiger and the workshop of the world.  

Chris Devonshire-Ellis
is the Founding Partner of Dezan Shira & Associates – a specialist foreign direct investment practice providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence, and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across India, China, Hong Kong, Singapore, and Vietnam, in addition to alliances in Indonesia, Malaysia, Philippines, Russia and Thailand, and liaison offices in Italy, Germany, and the United States. For assistance with corporate establishment and administration services in India, please email

       Chris can be followed on Twitter at @CDE_Asia.

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