Primary market revival earns deal makers a record $1 billion fees | Mint

Primary market revival earns deal makers a record $1 billion fees

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Summary

Through equity deals domestic firms and their promoters raised $18.4 billion in the first nine months of 2023, a 34.4% jump from the same period of last year, said the London listed data tracker group, Refinitiv.

MUMBAI : Buoyed by nimble primary markets, the country’s deal-makers earned a record of around $1 billion in fees—the highest ever this millennium for the January-September period, a study and Mint research revealed.

According to UK-based global deals analytics firm Refinitiv, on the back of thriving equity capital market deals and trending initial public offerings (IPOs) in India, investment bankers reaped a massive 41% increase in their fees at $967.5 million for the first nine months as compared to last year.

Citi, with $58.6 million in investment banking fees, earned the most from deal making activities in India according to Refinitiv. ICICI Bank Ltd, and Axis Bank Ltd followed Citi, earning $56.6 million and $56.4 million respectively from investment banking fees. Goldman Sachs investment banking income rose to $54.4 million from deal making in India, revealed the data.

Through equity deals domestic firms and their promoters raised $18.4 billion in the first nine months of 2023, a 34.4% jump from the same period of last year, said the London listed data tracker group.

This is the highest in terms of proceeds for the January-September period this year since 2021.

There were 253 equity and equity-linked deals for this period, which is up 30.4% year-on-year.

Through these equity capital market mandates alone, bankers earned $194.3 million, up 38% year-on-year, while M&A advisory fees grew 34% year-on-year to $362 million, said Refinitiv.

India’s primary market is on an uptrend since early March when US-based asset manager GQG Partners Llc invested around $2.2 billion in four Adani group firms.

The trend continued on Thursday with shadow bank Bajaj Finance Ltd announcing plans to raise up to 8,800 crore through qualified institutional placement (QIP), along with a 1,200 crore fund-raising plan via warrants.

Furthermore, domestic firms raised at least $3.5 billion through IPO during the first nine months of 2023 and several more IPOs are in the pipeline according to New-Delhi based primary market data tracker Prime Database.

Even though the number of stock debuts through IPOs increased in the January-September period, the amount raised via IPOs is still 38% lower than last year as most of the public floats have been relatively smaller in size this year.

At least 26,300 crore was raised by 31 Indian firms via IPOs in April-September, according to Prime Database.

This is 26% lower than the 35,456 crore raised by 14 IPOs during the first half of FY2023.

To be sure, 21,000 crore of the IPO mobilisation last fiscal came from the mega IPO by state-run insurance behemoth Life Insurance Corp. of India alone.

In August, Mint reported that the country’s primary market may be headed for a revival with at least 71 companies planning to launch their IPOs in the second half of the current fiscal.

According to Prime Database, Indian firms may raise as much as $10.7 billion or 89,069 crore via IPOs in the coming six months.

On Thursday, a Refinitiv report showed that through follow-on offerings, which accounted for 81% of India’s overall ECM proceeds so far, Indian firms raised $14.9 billion in the January-September period, up 85.0% from last year.

A Mint analysis in August showed that key stakeholders, including promoters of listed Indian companies, have sold shares worth over 1.35 trillion through bulk and block deals during the calendar year so far, out of which deals worth over 92,800 crore were concluded in the first five months of FY24, which is more than double that of the same period last year.

The latest Refinitiv report, however, showed a lull in mergers and acquisitions.

M&A deals in terms of overall size fell to a three-year low in the first nine months of 2023, totaling $65.6 billion.

“Private equity-backed M&A in India amounted to $11.1 billion, down 58.1% from a year ago, and the lowest first nine months period by value since 2020," said Refinitiv.

“High technology" sector attracted the largest number of deals in the January-September period of 2023, with the overall size totalling at $5.9 billion, said Refinitiv.

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