Top India Bourse Sees IPO Surge as Coffee Day, IndiGo Tap Market

  • 16 filed IPO documents in September quarter, most since 2011
  • NSE to lengthen bond futures tenures, add offshore ETFs

The National Stock Exchange of India, the nation’s biggest bourse, forecasts a pick-up in initial public offerings, extending the busiest quarter for new issuances in four years.

As many as 16 companies filed offer documents with the market regulator in the three months ended September, the highest since 2011, according to Prime Database, a New Delhi-based company that tracks share sales. Fifteen new offerings garnered 63.5 billion rupees ($976 million) this year through September, a fivefold increase from the year-earlier period.

“This is a start of a trend and we will see a lot more issuances than last year,” NSE’s Chief Executive Officer Chitra Ramkrishna said in an interview at her office in Mumbai. “Once the initial sales build momentum, secondary offerings will also come. There’s a lot more conversation going on.”

Coffee Day Enterprises Ltd., which runs the nation’s largest coffee chain, and InterGlobe Aviation Ltd., the operator of IndiGo airlines, are among firms seeking to tap demand that has fueled about $4 billion of stock investments from abroad this year, the most among eight Asian markets tracked by Bloomberg. A rout in crude oil and four interest-rate cuts this year have helped the benchmark S&P BSE Sensex cushion global volatility induced by China’s surprise currency devaluation.

Coffee Day’s 11.5-billion rupee IPO, India’s biggest since December 2012, was 10 percent subscribed as of 4 p.m. local time on Wednesday, data from the exchanges show. The sale closes on Oct. 16. InterGlobe has got approval for a $500 million offering. The Sensex has fallen by less than a third of the 11 percent slide in the MSCI Emerging Markets Index this year, data compiled by Bloomberg show.

Offshore ETFs

The NSE, also the world’s third-largest bourse by number of trades, is talking to its shareholders about listing itself, Ramkrishna said, without providing details on the possible timing of its IPO.

For now, the bourse plans to add to its range of exchange-traded funds and is in talks with exchanges in Singapore, Tokyo and Chicago to take its index franchisees offshore, Ramkrishna said. The exchange is expanding its list of sovereign bond futures to include tenures of more than 10 years, seeking to help companies raise long-term debt, she said.

“ETFs are a big passion for us,” Ramkrishna said. “We want every saver in India to have access to this. It is the biggest driver for financial inclusion,” she said, referring to Prime Minister Narendra Modi’s plan to tap individual savings in a country where the World Bank estimates 65 percent of adults don’t have access to a bank account.

Local equity funds took in 54.4 billion rupees in September, a 17th straight month of net inflows, data from the Association of Mutual Funds in India show. ETFs received a net 13.4 billion rupees in the January-September period, compared with an outflow of 9.5 billion rupees in the year-earlier period.

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