Jittery Equity Markets Burn Asian IPOs From South Korea to India
(Bloomberg) -- Skittish equity markets sentiment is taking a toll on initial public offerings across Asia, with a spate of deals being shelved while others are being scaled back.
Three offerings were withdrawn in South Korea over the past week, with companies citing difficulties in obtaining proper valuations. Together, the deals could have raised up to $1.19 billion in a market that hasn’t seen a big IPO since January.
Life Insurance Corp. of India’s $2.7 billion share sale, a milestone for Prime Minister Narendra Modi’s administration and the biggest ever in the country, had its final size cut by 60% as the war in Ukraine dented risk appetite. Indications from the unregulated gray market suggest the debut in Mumbai next week may be bumpy.
A Vietnamese electric-vehicles maker that had been flirting with a listing in the U.S. market this year said this will be postponed until 2023. Hong Kong -- usually one of Asia’s busiest venues for companies going public -- hasn’t seen a single IPO priced this month.
The war in Ukraine, rising inflation and hawkish central bank policies have shrunk appetite for new share sales worldwide. Only $996 million in proceeds have been raised across Asian exchanges in May, an 80% drop versus the same period last year.
Market uncertainty will continue to weigh heavily on sentiment for new listings, said Ke Yan, head of research at DZT Research in Singapore. “We have not seen the end of the these factors: inflation, rate hikes, QE exits, Ukraine tension, and to some extent the fear of slow down due to China’s zero-Covid policy.”
For those that managed to go public despite all this, performance has been discouraging. About 47% that listed in Asia since the start of March are now trading below their offer levels.
But some companies are still pressing ahead.
Chinese medical operation services company Yunkang Group Ltd. is expected to price on Thursday in what could be Hong Kong’s largest IPO since March, with debut slated for May 18. In India, logistics provider Delhivery Ltd. will be taking orders until Friday for an IPO as large as 52.35 billion rupees ($675 million), with listing expected next week.
Pertamina Geothermal Energy, owned by Indonesia’s state oil firm Pertamina Persero PT, is gauging investor demand for its shares until May 24. It might raise as much as $500 million through an IPO in Jakarta, IFR reported.
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