SYDNEY, June 27 (Reuters) - A possible revival in IPOs in Hong Kong after a pickup in Chinese regulatory approvals, and a string of mega deals in India are expected to make Asia a bright spot for equity deals in the second half of this year, bankers and analysts said.

Despite the extended downturn in Asia initial public offerings (IPOs), India's share in Asia equity capital market (ECM) deals is at record high now, and the surge in deals is expected to last for the foreseeable future, they added.

India's total ECM deals jumped 137% in the first half of this year from the same period of last year, with $28.5 billion raised, according to LSEG data. IPOs accounted for $4.25 billion of that, up 89.3% on last year's first half.

Hyundai India's $2.5 billion to $3 billion IPO due later in 2024 is set to be the South Asian country's largest ever new share sale, and it would also be one of the biggest IPOs globally this year.

In comparison, elsewhere in Asia, mainland Chinese ECM deals dropped nearly 70% to be worth $25.5 billion and IPOs were off 83.1% to $5.3 billion, the worst first half performance in 11 years.

The value of IPOs in Hong Kong fell from $2.12 billion in the first half of 2023 to $1.46 billion, the LSEG data showed.

"As investors get to grips with India's growth outlook and the growth adjusted valuations, helped further by the monetary easing environment, it will spur foreign investors to come back," said Citigroup Asia ECM origination head Udhay Furtado.

"That pivot to India growth is a staggered rotation. That's why it's not been a flood. I think you'll see that change with the names that are coming to market in the next 18 months as they are going to be globally impactful."

While Hong Kong's IPO market remains at a low, the Hang Seng's almost 9% rise in the past three months is seen as a positive to encourage more public market debuts in the coming months.

"While global investors remain cautious towards Hong Kong and China there is improved sentiment on the back of ongoing policy support and strong corporate earnings," said Sunil Dhuphelia, JPMorgan's co-head of Asia ECM, ex-Japan.

"This has led to global investors reducing underweight positions in the past couple of months," he said, referring to the two markets.

The China Securities Regulatory Commission (CSRC) has approved applications from 76 IPO hopefuls so far this year to list offshore, compared to 80 for all of 2023, according to the regulator's website.

Some Chinese companies, however, still find the process of gaining approval uncertain and volatile markets means some do not go ahead with launching a deal, bankers said.

"If the broader market valuation increases, you will see a lot more follow-on deals and blocks in Hong Kong from China – that will come first," said Selina Cheung, UBS' co-head of Asia equity capital markets.

"Hopefully we are on the right upward trend with the right policy supports. When the market is sufficiently strong, hopefully, the CSRC will have a relaxation towards approving IPOs."

(Reporting by Scott Murdoch in Sydney; Additional reporting Selena Li; Editing by Sumeet Chatterjee and Muralikumar Anantharaman)