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Asia ECM hits two-year high, up 15% on-year

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Hong Kong filings top 300 amid listing frenzy

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AI bubble fears loom over 2026 IPO momentum

By Kane Wu, Vibhuti Sharma and Yantoultra Ngui

HONG KONG/MUMBAI, Dec 5 (Reuters) - 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 $267 billion so far this year, up 15% 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 $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 $19.3 billion via IPOs so far

this year, LSEG data showed, down 6% from 2024's record $20.5

billion haul. The 2025 data does not include e-commerce platform

Meesho's $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 ( GS )

.

"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 $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 Co 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 U.S. assets in

recent months amid uncertainties about U.S. President Donald

Trump's trade and geopolitical policies.

"In periods of U.S. turbulence, we often see capital rotate

toward 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 toward frontier technologies that are

reshaping how we manufacture, consume and interact."

Hong Kong's Hang Seng Index has gained nearly 30%

this year, outperforming U.S. benchmarks, and India's benchmark

index is up about 10.8%.

Taking advantage of the momentum, Chinese battery giant CATL

raised $5.3 billion in a Hong Kong second listing,

and Zijin Gold International ( ZJNGF ) reaped $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 U.S. 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

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 selloff, that could be contagious ... Significant

selloffs 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 toward quality, cash-generative names and

away from the highest-multiple growth stories."