The India IPO party floats into 2025

Welcome to India Business Briefing. My name is Veena Venugopal, and I’m delighted to bring you news and insights from the world’s fastest-growing large economy every Tuesday and Friday. A bit about myself: I started my career looking after European mergers and acquisitions for an IT company, before shifting gears and moving into journalism. In the two decades since, I’ve covered everything from the Ambani brothers’ feud to Elon Musk’s acquisition of Twitter, and also written three non-fiction books. 

As you will know, in India news is often noisy and distracting and it’s difficult to keep up with everything. I’ll use my years of experience to sift through the headlines and dive deep into the stories that really matter to make sure you are ahead of the curve. I’d also love your feedback, so please write to me at indiabrief@ft.com, or just hit “Reply”.

On to today’s agenda. The government announced yesterday that Shaktikanta Das, whom local media had expected to stay on as Reserve Bank of India governor, will be replaced this week — more on this below. I’ll also be keeping an eye on protesting farmers, who have paused their “Delhi Chalo” (Let’s go to Delhi) march and are deciding on the next course of action. Plus, is the sheen wearing off the CFA certification? But first: five companies are set to float this week, including fintech MobiKwik tomorrow and Blackstone-backed International Gemological Institute on Friday; we take stock of the surge in India’s initial public offerings.

Market rush

IPO fever has seized India all year. According to S&P Global, 298 companies have gone public this year and raised Rs1.4tn ($16.6bn) in total, a 140 per cent increase from last year. Riding on this euphoria, predictions for IPOs in 2025 are off the charts. The Indian unit of consumer electronics group, LG, is planning a big offering in 2025, following in the footsteps of Hyundai, the other South Korean major that listed its Indian subsidiary this year. News reports suggest even Walmart-majority owned Flipkart is headed to the primary market next year. Each new interview with investment bankers seems to yield larger numbers of both volume and value of deals. 

But colour me sceptical. Audacious optimism and animal spirits are one thing, but ground reality is quite another. Global markets are entering the new year with a whole bunch of uncertainties — the security situation in the Middle East is volatile, in Europe governments are falling like ninepins, and going by everything announced so far, Donald Trump’s presidency will keep everyone’s nerves on edge. Volatile markets aren’t the best IPO vessels, as we have seen during and in the aftermath of Covid. Even in the buoyant markets we witnessed this year, IPOs haven’t had a very smooth run. Hyundai, which was the largest offering, closed its first day in the bourses 5.73 per cent down, and the stock is still trading below its listing price. MobiKwik, which floats tomorrow, has had to cut down its issue size three times since it first started planning an IPO in 2021. The debacle that was Paytm’s listing is still fresh on everyone’s mind and unlike in the pre-Covid era, investors are quicker to punish companies that value themselves too highly. 

It is in the interest of investment bankers to be optimistic about the IPO market, but I’ll be taking their projections for 2025 with a bagful of salt. If markets hold, it is likely that we will see a handful of big listings and a bunch of smaller ones. But liquidity and macroeconomic concerns will keep all exuberance in check. Companies and their bankers will have to get the timing and the valuation absolutely right. Even Bollywood cannot count on guaranteed blockbusters these days, much less capital markets. 

Do you think 2025 will be a record year for IPOs? Write to me at indiabrief@ft.com.

Go figure

It’s December, which means it’s the season for Spotify Wrapped. The music streaming platform published some mind-boggling stats about what users loved around the world.

The lamb of Wall Street?

A chartered financial analyst certification once granted easy entry to top investment houses, attracting high numbers of candidates hoping to get jobs in the US and Europe. But the qualification is now struggling to find takers. There were 163,000 exam registrations last year, down 40 per cent from the peak of 270,456 in 2019. In particular, the number of Chinese students taking the exam has fallen as the country’s economic downturn affected demand. 

So should Indian finance aspirants be eager to take the exam? The CFA Institute expects India to be the fastest-rising market for investment professionals, growing 33 per cent in the next decade. But don’t bring out the party hats yet. The Indian education system, which tends to create technically qualified but not very well-rounded individuals, plays spoilsport here too. The report makes a cautionary note that many Indian candidates who have completed all levels of the CFA exams fall short of industry requirements because they lack soft skills. The other threat is posed by technology. As machine learning and artificial intelligence advances, many of the quantitative aspects of financial analysis can be run without human expertise. The CFA Institute is racing to stay relevant in the light of these structural changes, and it is not optimistic about “hyper growth” in the future. It does have some words of advice: If you are young and just starting out, make yourself technologically savvy, and for those in middle management, be better communicators and leaders. If you are a successful top analyst, you don’t need their advice — you have it all figured out! 

More news you should know

1. Analysts say the RBI’s decision to hold interest rates last month may well have cost its chief his job. Shaktikanta Das had told the FT recently that the central bank was “rightly” focused on inflation. But his successor, revenue secretary Sanjay Malhotra, could set a new direction.

2. Assad’s gone. Here’s how a 50-year dynasty fell amid jubilant cheers, and our Middle East editor Andrew England’s analysis on what’s next for Syria.

3. An increasingly international labour market is forcing some companies to pay more.

4. What are Trump’s top five priorities for his first 100 days?

5. Omnicom has agreed to buy Interpublic in a $13bn all-share deal that will create the world’s biggest advertising agency by revenue and reshape the industry.

6. A trade war with the next US president could trigger deep rate cuts in Europe.

7. The political crisis in South Korea sparked by a “desperate” president’s botched attempt at martial law has roots in a traumatic past, as our recent Big Read explores.

My mantra

Don’t confuse activity for productive use of time. Addiction to social media is crazy. Whether it is Instagram or Twitter, the algorithm leaves us confused about what is urgent and what is important. Inevitably, urgent wins over important.

— Uday Kotak, founder and director, Kotak Mahindra Bank

Each week, we invite a top Indian business leader to tell us their mantra for work and life. Want to know what your boss is thinking? Nominate them by replying to indiabrief@ft.com. 

Quick question

Last week, Amazon founder Jeff Bezos said he preferred meetings that are messy, that wander and run overtime. What do you think? (I’ll show my hand: meetings that deviate from the agenda drive me mad.)

Write to us at indiabrief@ft.com

Thank you for reading. India Business Briefing is edited by Tee Zhuo. Please send feedback, suggestions (and gossip) to indiabrief@ft.com.