The New York Stock Exchange and the Nasdaq are starting to target more companies from India and South-East Asia. The trend for encouraging IPOs on US stock exchanges from these places comes at a time when the relationship between the US and China has been deteriorating.
Recent major Asian IPOs on US stock exchanges include the Singapore app company Grab that became the largest-ever merger with a special purpose acquisition company (SPAC). The deal raised $4.5 billion to help Grab gain a valuation of $40 billion to become the biggest stock market debut by a South-East Asian company.
While India has fairly complex regulations that prohibit the country’s companies from going public on foreign stock exchanges, there are encouraging signs that things could change in the future. This is because brands like the Delhi software company Coforge have found creative solutions to file for a US public offering in early 2022. Plus the Bangalore education brand Byju is expected to follow the SPAC route to gain a listing on the US stock markets.
But it’s not just India that is starting to get much more attention from US investors. Like India, Indonesia benefits from having a massive population along with the potential for a rapidly growing economy, while other South-East Asian countries such as Malaysia, the Philippines and Vietnam are showing signs of promise.
Recent US listings have also included South Korea’s e-commerce company Coupang Inc, but the overall trend seems to be focusing on the south of the continent. The success of Coupang in the US capital markets showed that listing on the NYSE or even carrying out a dual listing can be a viable prospect. With only one Indian company – the renewable energy brand, Azure Power – having completed a US IPO in the past decade, there is plenty of enthusiasm for bucking the trend.
Moving away from China
The focusing on southern Asia marks an effort to move away from markets lost due to a deterioration in relations between the US and China. Recently there was the pulling out of a US IPO by the Chinese insurance company FWD, while the ride-hailing firm Didi Global delisted from the New York Stock Exchange less than half a year after raising $4.4 billion in a massive New York IPO.
However, the trend towards investing in south Asian companies would have a long way to go before it could make up for lost Chinese markets. More Chinese companies went public in the US in the past year than firms from the Asian-Pacific region in the past decade.
While there are nearly 100 billion-dollar companies in the Asian-Pacific region, none of these are on anything close to the same scale as Chinese heavyweights such as Alibaba. But with no sign of an improvement in relations between the US and China, there might be many more Wall Street IPOs from India and South East Asia in the coming months.
