India's IPOs May Draw More Foreign Investors, Oppenheimer Says

Indian share sales are drawing more interest from overseas investors following a flood of equity issuances by Chinese companies this year, according to Oppenheimer Investments Ltd.

As many as four Indian companies may sell shares in the U.S. in the next 12 months after MakeMyTrip Ltd. became the first Indian IPO in the U.S. since 2006, Chetan Bhatia, managing director of Oppenheimer, said in an interview in Singapore yesterday. Oppenheimer helped manage the $70 million share sale for the Gurgaon, India-based online travel company, whose shares surged 89 percent on the first day of trading last month.

“Indian deals seem to be more palatable to investors right now than some of the Chinese deals,” Bhatia said. “There’s been lots of a heating up of capital there and in part, there’s maybe some flight of capital from China to India.”

Indian companies may raise about $12.3 billion from equity issuances by yearend, lagging behind only China in Asia, according to estimates by Citigroup Inc. A total $116 billion will be raised between now and the end of 2010 from IPOs and other offerings in the region, taking the total this year to a record $291 billion, the brokerage said.

Agricultural Bank of China Ltd., the nation’s largest lender by customers, raised $22.1 billion in a July initial public offering, the world’s largest ever. The shares yesterday closed at 2.6 yuan in Shanghai, below the IPO price of 2.68 yuan and at HK$3.75 in Hong Kong, compared with the HK$3.20 paid by IPO investors.

SouFun

SouFun Holdings Ltd., the operator of China’s biggest property website, surged 73 percent in New York Stock Exchange trading on its Sept. 17 debut. The company raised $125 million selling shares at the top of its price range. At least three other Chinese companies are scheduled to price U.S. IPOs this month, according to data compiled by Bloomberg.

“The conduit from China to the U.S. is much more established,” Oppenheimer’s Bhatia said. Over the next 12 months, about 10 to 15 Chinese companies will sell shares in the U.S., with further capital raising by firms that are already listed, he said.

Oppenheimer is seeking to bring industrial, education and health-care companies from China to the market and is planning deals for Indian infrastructure, medical-related, travel and consumer companies that can benefit from the nation’s economic growth and spending patterns, Bhatia said. He didn’t name specific companies.