India generated $222 million from investment banking activities in Q1FY20, down by 33.6 percent from Q1FY19, as per a report by Refinitiv titled India’s Investment Banking Review for First Quarter 2020.
This number is also the lowest Q1 activity fee since $122.9 million generated in Q1FY16, it noted.
Axis Bank took the biggest sum of $18.5 million in related fees – an 8.3 percent share of the pie. ICICI Bank came in second with 8.1 percent share and State Bank of India (SBI) was placed third with 8 percent.
Specifically, merger and acquisition (M&A) advisory fees generated $35.5 million, also down, by 66.1 percent compared to the same quarter last year. Fees for underwriting equity capital market (ECM) deals generated $55.3 million – up by 30.3 percent since Q1FY19.
Underwriting of debt capital market (DCM) deals brought in $73.2 million in fees – down by 22 percent from last fiscal. Fees for syndicated lending brought in $58 million in Q1FY20, down by 37.3 percent from Q1FY19.
M&A breakdown
India’s M&A activity reached $23.2 billion in Q1FY20 (down 14 percent from same period last year). Domestic deals in particular also dropped by 0.7 percent to $15.8 billion.
Inbound M&A slipped by 30.3 percent to $6.1 billion. France (33.3 percent), Japan (19 percent) and the United States (16.5 percent) held the largest share in inbound M&A.
Outbound transactions slipped 69.4 percent to $369.5 million – lowest since Q1FY13 which recorded $315.5 million. The US received a 69.9 percent chunk from nine deals worth $228.7 million.
Sectors such as energy and power topped the list with 32.7 percent share and $7.6 billion in value, up by 82.8 percent from the previous year. Financials came in second with 21.3 percent market share and Industrials placed third with 19.8 percent.
Top preferred advisory houses were KPMG and HSBC Holdings, who together snatched $1.5 billion worth in deal value or 6.5 percent of the market share. ICICI Bank rounded-up the top three with 4.5 percent market share.
ECM breakdown
The Indian EC markets raised $5.9 billion in Q1FY20, up by 62 percent. The largest issuance was by telecom major Bharti Airtel which launched a $2 billion qualified institutional placement (QIP) of shares and $10 billion convertible bonds. This deal alone made up 63.4 percent of the overall ECM proceeds.
IPOs totalled $1.2 billion in Q1FY20 an increase of 26.4 percent from last fiscal.
Issuances from the telecom sector topped the list with $3 billion in proceeds or 51.1 percent of market activity share, followed by financials that had 26.7 percent share and retail with 9.7 percent.
Bank of America (BofA) Securities underwrote $861.8 million proceeds with 14.5 percent market share, followed by Axis Bank (10.6 percent) and HSBC Holdings (9.6 percent).
DCM breakdown
Domestic primary bond offerings amounted to $24.3 million in Q1FY20, a 22 percent decline from the same period last year. Novelis Corporation was a major contributor with its $1.6 billion bond offering.
Among sectors, Financials netted $14.9 billion or 61.5 percent of market share, a 32.4 percent increase from $22.1 billion in Q1FY19. Energy and power come second with $4 billion or 16.6 percent market share, down 32.2 percent.
Here, Axis Bank topped in underwriting with related proceeds of $3.4 billion from 43 eligible bond offerings and accounted for 13.9 percent of the market share.
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