As India’s initial public offering (IPO) activity surges with several technology startups going public, investment bankers are bagging hefty fees.
The recent listing of India’s first food delivery startup Zomato to get listed on the stock exchange fetched bankers about Rs 2.4 billion in fees, according to Bloomberg-compiled data.
“Work-life balance for investment bankers, primarily the junior ones, has gone for a toss," Vijay Vaishnav, founder of Indusion Consulting Services Pvt., an executive search firm in Mumbai, told Bloomberg. “They are telling us they are sleep deprived due to the kind of fundraising pipeline."
Investor frenzy over initial public offerings (IPOs) that started with a recovery in the secondary stock markets and the revival in the economy in the second half of 2020 continued into this year and has turned out to be better in terms of funds raised and number of IPOs.
So far in 2021, as many as 41 companies have raised Rs 64,244 crore, of which the stocks of 16 such companies are trading above the issue price, according to ACE Equity data.
Funds raised via IPOs in FY22 till date are almost equal to what was raised in FY21, which was Rs 46,000 crore, the Securities and Exchange Board of India Chairman Ajay Tyagi had said. During the last 18 months, technology companies have raised 15,000 crores through IPOs.
An additional 25 to 30 companies are expected to come out with IPOs in the remaining months of 2021. Companies from food delivery, digital services, payment banks, analytics, trading and service platforms to niche segments and chemical makers don’t want to miss the chance to raise funds for expansion and working capital, apart from giving their marquee investors an exit option.
Tyagi said filings with the market regulator showed an IPO pipeline of around Rs 30,000 crore.
Thanks to travel restrictions amid the COVID-19 pandemic, the so-called roadshows where bankers hop from one city to another to pursue investors have now moved to Zoom meetings.
To cope with the increasing workload, companies including Citigroup Inc. has stepped up hiring boosting the local team by 25 to 40 percent, the report added.
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