China, Korea, Hong Kong and India struggle to create mega-IPOs
Screens showing rising stocks at the Taiwan Stock Exchange office following U.S. President Donald Trump’s surprise decision to pause global tariffs on April 10, 2025, in Taipei, Taiwan.
Daniel Ceng | Anatolia | Getty Images
There is no shortage of entrepreneurs, engineers or giant domestic markets in Asia. But when it comes to producing the blockbuster listings seen in the US, the region continues to lag behind.
The problem is not a lack of technological capacity. In China, India, South Korea and Japan, companies dominate many sectors, from semiconductors to electric vehicles, from robotics to advanced manufacturing. The bigger question is whether Asia’s capital markets are structured to turn firms into mega-cap public companies.
“Asia has the technological capacity, scale and talent base to support mega IPOs, but capital markets remain constrained by structural and behavioral factors,” said Lenny Zéphirin, founder of Zephirin Group.
Large listings have formed in Asia, but few on the scale of the largest US tech offerings.
Memory chip maker ChangXin Memory Technologies (CXMT) plans IPO in Shanghai raise at least 29.5 billion yuan ($4.3 billion)It is potentially the country’s largest by 2022, and Indian telecommunications company Jio Platforms is seeking a valuation of around $120 billion in its planned IPO.
By comparison, Space X debuted at a $1.77 trillion valuation and even surpassed $2 trillion in its first days of trading.
The valuation premium has historically led some of Asia’s largest technology companies to seek U.S. markets. Chinese internet giants Alibaba’s And JD.com Both subsequently listed in New York to access deeper pools of international capital before pursuing a listing in Hong Kong.
A common theme is emerging across the region: Companies often face less patient private capital, stricter listing requirements and lower valuation multiples than their U.S. counterparts.
“The big push in the U.S. has been the huge amount of private capital available through private equity firms to get these types of firms to a stage where they can enter the market at a very, very high valuation,” said John Fildes, partner at Bain & Co.
Analysts noted that the US market continues to reward technology companies with higher valuation multiples than Asian stock markets.
China and Hong Kong: Technology is not a constraint
It is claimed that China has the industrial base that can produce companies on a scale comparable to America’s largest technology firms. Leadership in artificial intelligence, semiconductors, robotics, and advanced manufacturing shows that innovation is not the primary bottleneck.
Analysts instead point to the financial ecosystem.
“China certainly has the industrial capabilities, market scale and talent pool to create a mega-sized company,” said Wenjie Ding, global equity investment strategist at China Asset Management.
While China’s venture capital sector generally operates with shorter investment horizons than the United States, cross-border capital remains more constrained and institutional capital is less willing to fund long-term, high-risk innovations.
Ding argued that larger allocations from local insurance companies and pension funds, as well as expanding cross-border investment channels through Hong Kong, would help narrow the gap.
Zéphirin said Hong Kong has the infrastructure to host very large offerings but lacks the ecosystem to consistently produce them.
While the city’s largest IPOs have historically been dominated by banks rather than venture capital-backed technology companies, analyst-driven valuation narratives remain less developed.
South Korea: World-class industries, valuation discount
South Korea is home to globally competitive semiconductor, battery and technology companies, but industry experts have noted that the market structure prevents many firms from achieving U.S.-style valuations.
Peter Kim, global investment strategist at KB Financial Group, said: SK Hynix And Samsung Electronics currently accounts for roughly half of the reference kospi directory, leaving the rest of the market relatively small. Even SK Hynix has plans to list in the US as investors reward semiconductor companies abroad with increasingly higher valuations.
Other strengths, including automobiles and shipbuilding, belong to industries that have traditionally traded at lower valuation multiples.
Analysts also noted the chaebol system of family-run conglomerates.
“Chaebols were central to Korea’s industrial catch-up, but today they hinder rather than help create new independently listed champions,” Javelin Wealth’s Polka Mishra told CNBC via email.
He added that the long-standing “Korean discount,” concentrated ownership and historically limited cornerstone investment have also constrained mega IPOs. Recent governance reforms and a new core investor framework could boost confidence, but meaningful involvement from long-term institutions such as the National Pension Service will likely be needed before Korea can consistently build much larger lists.
India: High demand but domestic ambitions
India has a strong IPO market, supported by resilient domestic participation from retail investors, mutual funds and pension capital.
Jio Platforms’ planned listing could be a turning point for India’s capital markets. The telecom and digital services giant has applied for an initial public offering that is expected to add value to the company. around 120 billion dollars.
But even at that size, it would remain well below the valuations of the biggest US tech IPOs, as Indian tech champions are heavily domesticated and under pressure to show profits sooner.
EY India partner Pranav Sayta said the structural shift towards equity investing has made the market unusually resilient, with systematic investment schemes and pension funds continuing to support listings despite periods of volatility.
But analysts say a mega IPO requires more than ample demand.
“With its strong economy and abundant entrepreneurial talent, India is well positioned to undertake many IPOs. But the time is not yet ripe for mega IPOs on the scale of some of the major US listings,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
He argues that India’s largest tech companies continue to focus primarily on the domestic market rather than reaching global scale. Many startups also operate in lower-margin businesses such as food delivery and express commerce, with investors often demanding profitability much earlier than their U.S. counterparts.
“A lot of private equity funds available in the US are not available for Indian startups,” said Vijayakumar. “There is also pressure on Indian startups to show profits early. So they are chasing profits before they grow.”
Taken together, analysts identify a gap that extends beyond individual purchases. The U.S. benefits from abundant venture capital willing to finance companies for a decade or more before listing, deep corporate and retail involvement, broad analyst coverage, and investors willing to pay for future growth.
But the bigger picture is that Asia is slowly producing many of the same ingredients. India’s domestic savings pool continues to deepen, China reopens its technology financing pipeline, South Korea continues its governance reforms, and Hong Kong remains the region’s gateway to international capital.
—CNBC’s Ellyani Hanis contributed to this report.
