New Delhi, March 16 -- India's primary market had a blockbuster run last year, raising more than $21 billion across over 370 initial public offerings (IPOs). That firmly places the country among the world's most active IPO venues, ranking third behind China/Hong Kong and the US in proceeds. Yet, as is often the case in markets, the headline numbers tell only part of the story.

At UBS, we pay close attention to capital-raising activity in emerging market (EM) public equities for a simple reason. Over the past two decades, the MSCI EM index has significantly underperformed US equities despite far stronger economic growth.

Nominal GDP in EM economies has expanded roughly fivefold over the past 20 years, compared with about 2.5 times in the...