(Photo: Bloomberg)
(Photo: Bloomberg)

Investment banking  fees  rises  5.8% to $783.5 mn during Jan-Sep

  • Debt issues drove fee generation, recording total fee of $201.2 million in the first nine months of 2019
  • The strong debt underwriting fee came on the back of primary bond offerings from India-domiciled issuers hitting a record high at $66.7 bn

Mumbai: Indian investment banking fees rose 5.8% to $783.5 million in the nine months through 30 September from a year earlier, boosted by a surge in debt underwriting fees, according to a report by Refinitiv, a financial market data provider.

Investment banking fees for the first nine months was at its highest since 2017, when fee generation rose to $859.9 million, according to the data.

Debt issues drove fee generation, recording total fee of $201.2 million in the first nine months of 2019, more than double that of the previous year and the best-ever since 2000.

The strong debt underwriting fee came on the back of primary bond offerings from India-domiciled issuers hitting a record high at $66.7 billion during the first nine months of 2019, more than double the amount raised a year ago. The largest bond issue worth $1.2 billion was launched by the London branch of State Bank of India, making it the largest bond issuance from an Indian company so far this year.

(Graphic: Paras Jain/Mint)
(Graphic: Paras Jain/Mint)

About 70% of the debt capital market fees came from companies in the financials sector, which raised $46.2 billion, showing a 73.2% increase in proceeds raised compared to last year. This was followed by bond issuances from firms in the energy and power sector, which grew 5 times to $10.3 billion.

While the debt market did well for bankers, equity capital markets underwriting fee fell about 5% to $134.2 million from the same period last year, as initial public offerings (IPO) by Indian companies fell 49% to $2.2 billion.

Merger and acquisition advisory fees also fell 16% to $238.2 million from a record high set a year ago. This was mainly due to a slowdown in overall M&A deals in India, which fell about 46% to $61.2 billion during January-September mainly because of a sharp drop in cross-border deals.

Axis Bank took the top spot in India’s investment banking league tables with a 9.6% market share and $75.5 million in related fees, followed by ICICI Bank in the second place, and State Bank of India at the third position.

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