[HONG KONG/MUMBAI] A strong pipeline of high-profile IPOs by companies in China and India looking to tap into a move by investors to diversify bets will bolster Asian equity capital deals next year, although worries over soaring tech valuations could drag on momentum.
Asian equity capital market (ECM) deals, including initial public offerings (IPOs), follow-ons and convertible bonds, have totalled US$267 billion so far this year, up 15 per cent from 2024 in the first annual rise since 2021, LSEG data showed.
Hong Kong, the preferred listing destination for Chinese companies, dominated regional ECM deals with US$75 billion so far in 2025, more than triple what was raised there last year and the highest since 2021, the data showed.
India, meanwhile, has raised US$19.3 billion via IPOs so far this year, LSEG data showed, down 6 per cent from 2024’s record US$20.5 billion haul. The 2025 data does not include e-commerce platform Meesho’s US$604 million IPO that is underway this week.
“China’s recovery and India’s continued expansion have been the twin engines driving equity issuance across Asia this year,” said James Wang, head of Asia ex-Japan ECM at Goldman Sachs.
“We expect both markets to remain central to regional deal flow in 2026,” he said. “We are still in the early stages of a broader upswing … supported by Asia’s economic growth and improving corporate earnings.”
India is set to generate as much as US$20 billion from IPOs in 2026, according to a forecast by investment banking firm Equirus Capital. Over 300 companies have filed for Hong Kong listings, public disclosures showed.
Landmark offerings such as the IPO of India’s Reliance Jio Platforms and the Hong Kong second listing of China’s Zhongji Innolight are expected to lift volumes significantly in 2026, advisers said.
Pivoting away from US assets
Asia has benefited from a global move by investors to diversify their portfolios, pivoting away from US assets in recent months amid uncertainties about US President Donald Trump’s trade and geopolitical policies.
“In periods of US turbulence, we often see capital rotate towards Asia in search of diversification and structural upside,” said Li He, partner and Asia ex-Japan co-head at law firm Davis Polk.
“The recovery of 2025 was not a flash in the pan. It reflected deep liquidity pools across the region and an unmistakable shift towards frontier technologies that are reshaping how we manufacture, consume and interact.”
Hong Kong’s Hang Seng Index has gained nearly 30 per cent this year, outperforming US benchmarks, and India’s benchmark index is up about 10.8 per cent.
Taking advantage of the momentum, Chinese battery giant CATL raised US$5.3 billion in a Hong Kong second listing, and Zijin Gold International reaped US$3.5 billion from an IPO in two of the world’s largest offerings this year.
AI bubble concerns
The biggest bout of volatility in US stocks in months in November revealed cracks in the global AI rally, raising questions about whether markets have been in the grips of a speculative bubble that may be popping.
Concerns about soaring valuations come as Chinese large language model developers Zhipu AI and MiniMax, and AI chip makers MetaX and Kunlunxin, among others, are planning IPOs, Reuters has reported, in deals that could total billions of US dollars.
Arun Balasubramanian, a partner at law firm Freshfields, said a lot of AI technology and digital infrastructure assets have yet to tap public markets in Asia, but the jury is still out on whether there is overvaluation in AI.
“If some of these concerns of an AI bubble result in a significant sell-off, that could be contagious … Significant sell-offs do affect not just one sector, but affect the markets as a whole. So that’s a potential risk.”
Risk-averse investors could find India attractive as the market is relatively AI “underweight”, said Pratik Loonker, who heads ECM for India’s Axis Capital, adding that global AI-driven de-rating could weigh on deal pricing and valuations.
“As AI spending and earnings visibility are reassessed, investors are rotating towards quality, cash-generative names and away from the highest-multiple growth stories.” REUTERS
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