Indian IPO pipeline strong, other markets 'pretty dead': Link group execs

Number of IPOs happening in India probably equal to aggregate everywhere else combined, says Australia-headquartered firm

Link Intime India, a unit of Australia-headquartered Link group, is a leading registrar and share transfer agent (RTA), a Sebi-registered intermediary that maintains investor records for an initial public offering (IPO) and post-listing. Sydney-listed Link held its board meeting in Mumbai last month, marking India's strategic importance. Michael Carapiet, chairman of Link group, and Vivek Bhatia, group chief executive officer and managing director, told Samie Modak on the occasion that their India business stands out among global peers.

Here are edited excerpts from the interview.

How is the RTA business in India?

Carapiet: We've been extremely pleased with how the Indian business has performed over a reasonably long period. We've seen a sharp increase in the last three years as the market has grown quite dramatically. In the next few months, there could be some fallout from the global turbulence we're seeing in markets, but by and large, the Indian listed market seems to be resolute in its growth. We're not seeing that much negative impact here compared to what we're seeing overseas. The IPO pipeline here is still reasonably strong, offshore in many of our markets is pretty dead. The number of IPOs that are happening in India would probably be equal to the aggregate everywhere else combined. This is, in a relative sense, a very strong listed equity market currently.

You probably were referring to last year; this calendar even the Indian IPO market has taken a turn for the worse.

Carapiet: You've actually got a pipeline of IPOs in India here whereas in other markets, they're not even thinking of going to IPO. Last year, we did something like 30 IPOs. And this year so far, we're already up to 24 (IPO filings). So whilst the overall market might be a bit slower, the Link Intime business seems to be holding up really well. That's the wonderful thing about sitting in Sydney and looking at the operations here. It is really an outlier in terms of growth relative to what we're seeing elsewhere in the world. Our Indian business is growing about as well as we could have hoped for.

Bhatia: We operate predominantly in the UK and in Australia, where we haven’t seen the growth that we have seen in India. Other markets have been very depressed and subdued with hardly any IPOs at the moment. Also, there's hardly any growth of investor or shareholder numbers, but you continue to see those grow quite rapidly in India.

What’s your strategy to garner market share? Is it your digital progress or is it to do with competitive bidding and compromising margins?

Carapiet: It has to be the level of trust that your people get from the clients. And in this sort of market, your relationship and the comfort with investment bankers and other intermediaries also matter.

Bhatia: Your market presence, your market reputation is very important. Clearly, it is high on your radar to have strong levels of integrity in the way your dealings are conducted. We pride ourselves on being a very compliant organisation, but also very focused around ensuring that we ensure high levels of integrity in the way we operate. The other things that are obviously clearly important are the use of technology and having great people.

Would you like to share some market share numbers?

Bhatia: In FY23, we had 67 per cent of the market share of the IPOs, up from 57 per cent last year. In 12 out of the last 18 years, we have done the highest number of IPOs in India.

In terms of the number of investors serviced, we serve close to about 90 million investors, for about 1,500 listed entities.

You are listed in Australia. Any plans to list the India unit?

Bhatia: We don't have any current listing plans as such in the Indian market. However, from time to time, we look at what is in the best interest of our shareholders and we continuously evaluate options where we can maximise the value for our shareholders of the various businesses that we hold in the various parts of the world.

India has seen several regulatory changes. How has it impacted your business?

Carapiet: If markets were not working well, people would not participate. The fact you've got such a huge increase in people participating in the listed market says that whatever's being done is encouraging them to participate.

And the independent facts would tell you that the Indian stock market has got a lot more investors, a lot more companies, and a growing overall market capitalisation. Hence, all the signs are that the market is healthy. Why is the market healthy? A whole host of reasons, but one of the key reasons for listed markets being healthy, you've got to give the regulators some credit for that.

How big is the threat of cybersecurity and how does your company manage to stay ahead of the curve with regards to this?

Carapiet: A lot of expenditure, a lot of caution and some luck. You have to take it extremely seriously, but just taking it seriously, what does that mean? It means you've got to put resources into it. It means it requires a focus.