India investment bankers earn record Rs 2,200 crore in 2021

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India investment bankers earn record Rs 2,200 crore in 2021

Synopsis

The fee collected by bankers through share sale proceeds was more than three times at Rs 776.7 crore compared with 2020.

As much as $16.59 billion was raised in India in 2021 through 120 IPOs, compared with $3.64 billion from 44 deals in 2020, the data showed.

India’s investment banking industry witnessed its best ever year in 2021, as a wave of public offerings and share sales helped the industry collect its highest fee from the deal-making business.

Investment bankers made Rs 2,200 crore, thanks to a series of big-ticket IPOs and emergence of India’s tech unicorns from startups to matured listed entities. The fee collected by bankers through share sale proceeds was more than three times at Rs 776.7 crore compared with 2020, according to data compiled by Refinitiv.

“2021 was a record-breaking year for IPOs and listings despite Covid uncertainties. We evolved, saw vibrant markets on the back of huge interest from institutional and retail investors participating in many good and differentiated companies including digital companies,” said Atul Mehra, joint managing director and co-head of investment banking at

.

Investors are now expected to be more selective, cautious and sensitive to valuation, he said, while warning that “all deals that are getting filed might not get done”.

“Bankers have strengthened their team sizes and sharpened their expertise to cater to the diverse IPO mandates. But the fees as a percentage in India are significantly lower than the global fees,” he added.

As much as $16.59 billion was raised in India in 2021 through 120 IPOs, compared with $3.64 billion from 44 deals in 2020, the data showed.

Top IPOs in 2021 included those of payments giant Paytm’s parent One97 Communications, CarTrade, Sona BLW, Clean Science, Fino PayBank, Aditya Birla Sun Life AMC, Kalyan Jewellers, MTAR Technologies, Laxmi Organic, Easy Trip and Rakesh Jhunjhunwala-backed Nazara Technologies.

“In 2021, investment banks have benefited from robust activity in equity capital markets, equity private placements and deal making in new-age technology companies, increased private equity buyouts especially leveraged transactions as well as domestic consolidation with old economy companies across industries foraying into digital areas,” said Utpal Oza, head of investment banking at Nomura India.

Eight Indian startups had gone public in 2021. The IPO of India’s first listed consumer-Internet startup, Zomato, was subscribed nearly 40 times, while the share sale of India’s biggest cosmetics etailer, Nykaa, was subscribed 81.7 times, giving the company a market capitalisation of nearly $13 billion.

Equity and equity-related offerings in Asia Pacific, excluding Japan, raised $506.9 billion in 2021, an all-time high and a 20.7% increase in proceeds compared the year before.

“The IPO and fundraising boom of 2021 was driven by multiple factors … Optimism about the Indian economy, strong global and domestic liquidity driven by supportive monetary policy and the Indian tech sector coming of age,” said Raj Balakrishnan, head, India investment banking, Bank of America.

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