This week, IPOs were the buzz across global markets, as big conglomerates and late-stage startups alike rushed to debut across public markets in India, Hong Kong, Japan, and the Middle East.
Following the US Federal Reserve’s outsized interest rate cuts last month, companies are anticipating a fresh wave of capital flow into equities, emboldening them to target ambitious valuations as they go public.
The optimism positions several private equity and venture capital investors for strategic exits. New investors may now feel more inclined to pour capital into growth-ready startups, even as there are overhangs such as the outcome of the US presidential elections, geopolitical tensions, and the question of whether retail investors will lap up the newly-listed shares.
For instance, Hyundai Motor India’s shares fell in their market debut this week—following India’s largest-ever, $3.3 billion IPO—as retail investors gave a lukewarm reception amid concerns about a lofty valuation and an auto industry slowdown.
Meanwhile, Reuters reported that Indian food delivery giant Swiggy is internally aiming for a company valuation of $12.5-13.5 billion for its upcoming IPO, cutting its target by 10-16% due to market volatility.
In Hong Kong, however, shares of Chinese self-driving tech company Horizon Robotics opened 30% higher than their IPO offer price on Thursday. Shares of drinks maker China Resources Beverage also leapt 13.5% on their HKEX debut on Wednesday. These two initial share sales, which raised a combined $1.3 billion, raise hopes for a revival in the Chinese IPO market, which has been struggling for the past three years.
In Japan, Tokyo Metro’s shares shot up 45% in their market debut on Wednesday, after Japan’s largest IPO in six years raised $2.3 billion.
Chinese self-driving startup WeRide also raised a combined $440.5 million in its US IPO and a private placement.
Among forthcoming IPOs, hypermarket chain operator Lulu Retail Holdings is planning to go public in what could be the UAE’s largest initial share sale this year. Reuters reported this week that the offering could raise between $1.7-1.8 billion for a 25% stake.
India’s top private lender HDFC Bank’s HDB Financial Services unit will also look to raise up to $1.5 billion in its IPO.
Scroll down for the other stories that made headlines this week.
Data-led stories and other deep dives
This week, we released our quarterly report on startup fundraising trends in India. Startups in the country secured $4.3 billion from private investors in Q3 2024, marking a 17% decline sequentially, according to the India Deal Review: Q3 2024 report. Read the report for insights into the top industries that raised funds in the quarter, the top deals in the period, and the list of most active investors.
We also wrote this week about a resurgence in extension rounds— additional capital sourced from existing or new investors under similar terms and valuation levels as the previous financing rounds—in China. The trend paints a bleak picture of how privately-owned firms have been adapting and surviving amid the funding winter.
In another deep-dive, we wrote on how a rule proposed by Nasdaq to clamp down on penny stocks could rewrite the fate of several China-based companies listed on the US exchange, pushing them towards the hands of a PE fund or another bourse.
Interviews
Top executives from KKR-backed Indian financial services firm Avendus, Hong Kong-based private credit manager ADM Capital, and US investment manager Federated Hermes spoke to us this week.
Avendus is betting on the Southeast Asian market, hoping to cash in on the region’s technology boom, its managing director and head of Southeast Asia, Varun Gupta said. “Southeast Asia is rapidly emerging as a great market for tech and consumer innovation… and we are focusing on all key markets.” The firm is scouting for growth opportunities across different stages of business evolution.
Lisa Genasci, Managing Director, Sustainable Finance at ADM Capital, spoke on ESG risk management. ESG risks should be part of the due diligence process in the same way financial, legal, or tax risks, she told DealStreetAsia. “Why wouldn’t we consider climate risk, when it includes the physical risks associated with extreme weather events or the potential for regulatory change, for example? This is integral to our fiduciary responsibility.”
Federated Hermes, meanwhile, is adjusting to the challenging global exit market by ensuring it has more control over exits when deals are structured. In the case of exits through IPOs, the firm “will ensure that, wherever possible, we have the ability to sell shares directly,” said Karen Sands, COO at the firm.
LP-GP news
For our LP View column this week, we interviewed Sam Robinson, Managing Partner of North East Private Equity. Even as the pressure by LPs for distributions is pushing action for exits, fund managers should not overlook the total value to paid-in (TVPI) metric, he said. “Don’t just get DPI and sacrifice TVPI. DPI allows LPs to have money to invest in your next fund. But if your overall performance isn’t very good, it’s not convincing for LPs to re-up,” he advised.
We got wind this week that India’s quasi-sovereign fund National Investment and Infrastructure Fund (NIIF) is in talks to invest in InvAscent’s latest fund, which focuses on small- and mid-sized healthcare businesses in India.
Blackstone Strategic Partners has bought stakes worth a cumulative $1 billion sold by Fubon Life Insurance from its portfolio of five infrastructure funds, sources told DealStreetAsia.
World Bank Group member IFC is mulling a proposal to invest up to $50 million in the sixth flagship fund of Malaysian PE firm Creador. Creador VI is a $800-million vehicle focused on mid-market companies in South and Southeast Asia.
India’s climate-focused venture capital firm Avaana Capital said it has closed its Climate and Sustainability Fund at $135 million, larger than its target of $120 million.
Mubadala Capital has closed its Private Equity Fund IV with total commitments of $3.1 billion, exceeding its initial target by more than $1 billion.
Singapore-listed Keppel expects to make the first close of its latest private credit fund for infrastructure-linked companies in Asia Pacific at around $300 million by the end of October. The target corpus has been revised to $1 billion from the original $800 million, which signals the rising demand from borrowers.
The Indian government approved a $119 million fund for its burgeoning space sector, with 40 startups expected to benefit as the country strives to win a significant share of the commercial space market by 2033.
In Indonesia, President Prabowo Subianto wants to establish a new investment agency that would become a holding company for state investments, similar to Singapore’s Temasek.
China’s Ping An Insurance Overseas has closed its third PE fund at $850 million. The fund commitments were led by AlpInvest Partners and Switzerland’s Montana Capital Partners. Singapore sovereign wealth fund GIC and Ping An also signed on as LPs.
Deals and other corporate news
This week, DealStreetAsia was the first to report that Singapore buyout firm Tower Capital Asia was in talks to acquire the parent company of Kiztopia, an indoor playground operator in the city-state, which was soon followed by a company announcement confirming the same.
Indonesian fishery startup FishLog is said to be undergoing significant changes amid financial constraints, downsizing its workforce by more than half and exploring a strategic M&A.
Meanwhile, the Indonesian aquatech startup Aruna has raised fresh capital as part of an ongoing Series B funding round.
There was more bad news in the fintech sector as Indonesia’s OJK revoked the licence of Investree due to multiple violations of regulatory policy. It will now be required to cease all operations.
In India, edtech unicorn upGrad has raised an additional $60 million from existing backer and Singapore state investor Temasek, while B2B marketplace Udaan is reportedly in talks with UK savings and investment firm M&G Prudential to raise a new funding round of $80-100 million. Meanwhile, healthtech company Even Healthcare raised $30 million in a Series A round led by Khosla Ventures.
Biofourmis, the digital therapeutics unicorn founded in Singapore, has merged with US-based at-home remote health monitoring company CopilotIQ in an all-stock deal.
Earnings updates
Indian food delivery giant Zomato and digital payments major Paytm reported their quarterly earnings this week.
Zomato’s net profit for the September quarter zoomed 4.8 times from a year ago but it was 30% down sequentially.
One 97 Communications Ltd., the parent company of Indian digital payments firm Paytm, reported a profit after tax of Rs 930 crore ($110 million) for the September quarter (Q2 FY2025), buoyed by gains from the sale of its ticketing business to Zomato. Separately, the National Payments Corporation of India (NPCI) gave Paytm permission to restart onboarding new UPI customers.
We also reported, based on ACRA filings, that Singaporean equity management platform Qapita Fintech and its subsidiaries posted losses of $3.44 million on revenues of $6.14 million during the financial year ended March 31, 2024.
Thanks for reading. Stay tuned for more market moves and startup stories next week!
