India’s equity and equity-linked fund raising in the first six months of calendar 2015 surged to an eight-year high, with many large corporations tapping capital markets anticipating capital expenditure and debt reduction requirements.
According to Thomson Reuters’ six-month review of Indian equity capital markets (ECM), domestic companies raised a total of $15.3 billion (about R92,000 crore based on the current exchange rates), up 172% from the corresponding period last year. Indian companies raised $17.3 billion in the first six months of calendar 2007.
The equity deal count also rose to 69 from 56 last year, data showed.
The fund raising was largely dominated by follow-on offerings that are valued at $14.8 billion. The first half saw two marquee deals – the Sun Pharma block deal ($3.2 billion)and the Coal India disinvestment ($3.7 billion) – that helped mop up nearly half of the total follow-on deal value.
In April, Japanese drugmaker Daiichi Sankyo sold its entire stake in Sun Pharmaceutical Industries through block trades for $3.2 billion. This is the biggest block trade in India this year. The government raised $3.7 billion by selling part of its stake in Coal India, which was the largest ECM deal in India so far this year.
Initial public offerings (IPO) also saw a significant increase, both in value and volume terms, from a slow first half in 2014. Fund raising through IPOs in January-June 2015 surged to $585.6 million compared with $81.7 million last year.
Goldman Sachs took the lead in Indian ECM underwriting with $4.3 billion in related proceeds and captured 27.7% of India’s ECM activity. Bank of America Merrill Lynch followed at second place with 9% market share worth $1.4 billion in related proceeds. In the third place, Credit Suisse captured 8.3% market share.
According to estimates, equity capital raising generated imputed fees worth $97.2 million, a 144.0% increase from the comparative period last year. Kotak Mahindra Bank led the India ECM imputed fee rankings with $11.8 million in fee revenue.