China, Korea, Hong Kong and India struggle to create mega-IPOs

Asia has no shortage of entrepreneurs, engineers or giant domestic markets. Yet when it comes to producing the kind of blockbuster listings seen in the U.S., the region continues to lag. 

The challenge is not a lack of technological capability. Across China, India, South Korea and Japan, companies dominate industries ranging from semiconductors and electric vehicles to robotics and advanced manufacturing. The bigger question is whether Asia’s capital markets are structured to nurture firms into mega-cap public companies.

“Asia has the technological capability, scale, and talent base to support mega-IPOs, but capital markets remain constrained by structural and behavioral factors,” said Lenny Zéphirin, founder of the Zephirin Group. 

Asia has produced large listings, but few on the scale of the U.S.’s biggest technology offerings.

Memory chipmaker ChangXin Memory Technologies (CXMT) is planning a Shanghai IPO expected to raise at least 29.5 billion yuan ($4.3 billion), potentially the country’s largest since 2022, and Indian telco Jio Platforms is seeking a valuation of about $120 billion in its planned IPO.

In comparison, Space X debuted at a valuation of $1.77 trillion, even topping $2 trillion in its earliest days of trading.

A valuation premium has historically prompted some of Asia’s biggest technology companies to tap U.S. markets. Chinese internet giants Alibaba and JD.com both listed in New York to access deeper pools of international capital before later pursuing listings in Hong Kong.

A common theme emerges across the region: companies often face less patient private capital, stricter listing requirements and lower valuation multiples than their U.S. counterparts.

“The big driver in the U.S. has been a very large amount of private capital being available through private equity firms to carry these sorts of firms through to a stage where they come to market with a very, very high valuation,” said John Fildes, partner at Bain & Co.

The U.S. market also continues to reward technology companies with higher valuation multiples than Asian exchanges, echoed analysts.

China arguably has the industrial base to produce companies comparable in scale to America’s largest technology firms. Leadership in artificial intelligence, semiconductors, robotics and advanced manufacturing demonstrates that innovation is not the primary bottleneck.

Instead, analysts 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, investment strategist for global capital investment at China Asset Management.

China’s venture capital industry generally operates with shorter investment horizons than the U.S., while cross-border capital remains more restricted and institutional capital is less willing to fund long-duration, high-risk innovation.

Ding argued that larger allocations from domestic insurers and pension funds, together with expanded cross-border investment channels through Hong Kong, would help narrow the gap.

Hong Kong retains the infrastructure to host very large offerings but lacks the ecosystem that consistently produces them, said Zéphirin.

The city’s largest IPOs have historically been dominated by banks rather than venture-backed technology companies, while analyst-driven valuation narratives remain less developed.

South Korea is home to globally competitive semiconductor, battery and technology companies, but industry experts noted that the market structure has prevented many firms from achieving U.S.-style valuations.

Peter Kim, global investment strategist at KB Financial Group, said SK Hynix and Samsung Electronics now account for roughly half of the benchmark Kospi index, leaving the rest of the market comparatively small. Even SK Hynix has plans for a U.S. listing as investors increasingly reward semiconductor firms with higher valuations overseas.

Other strengths, including autos and shipbuilding, belong to industries that traditionally trade at lower valuation multiples.

Analysts also pointed to the chaebol system of family-run conglomerates. 

“Chaebols were central to Korea’s industrial catch‑up, but today they are more hindrance than help for creating new, independently listed champions,” Polka Mishra of Javelin Wealth told CNBC via email.

She added that the long-standing “Korea discount,” concentrated ownership and historically limited cornerstone investment have also restrained mega-IPOs. Recent governance reforms and a new cornerstone investor framework could improve confidence, but meaningful participation from long-term institutions such as the National Pension Service will likely be needed before Korea can consistently produce much larger listings.

India has a strong IPO market, underpinned by resilient domestic participation from retail investors, mutual funds and pension capital.

Jio Platforms’ planned listing could become a watershed moment for India’s capital markets. The telecom and digital services giant has filed for an IPO expected to value the company at about $120 billion.

But even at that size, it would remain well below the valuations of the biggest U.S. technology IPOs as Indian tech champions remain largely domestic-facing and under pressure to show profits earlier. 

Pranav Sayta, partner at EY India, said a structural shift toward equity investing has made the market unusually resilient, with systematic investment plans and pension money continuing to support listings despite periods of volatility.

But analysts say producing a mega-IPO requires more than abundant demand.

“India, with its strong economy and abundant entrepreneurial talent, is well positioned to come out with many IPOs. But the time is not yet ripe for mega-IPOs of the scale of some of the large U.S. listings,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

He argues that India’s largest technology companies remain focused primarily on the domestic market rather than pursuing global scale. Many startups also operate in lower-margin businesses such as food delivery and quick commerce, while investors typically demand profitability far earlier than their U.S. counterparts.

“The kind of abundant private equity funds available in the U.S. are not available for Indian startups,” Vijayakumar said. “Also, there is pressure on Indian startups to show profits early. So, they pursue profit before growth.”

Taken together, analysts describe a gap that extends beyond individual exchanges. The U.S. benefits from plentiful venture capital willing to finance companies for a decade or more before listing, deep institutional and retail participation, broad analyst coverage and investors willing to pay for future growth.

But the bigger picture is that Asia is gradually building many of the same ingredients. India’s domestic savings pool continues to deepen, China is reopening its technology financing pipeline, South Korea is pursuing governance reforms and Hong Kong remains the region’s gateway for international capital.

—CNBC’s Ellyani Hanis contributed to this report.