After lying low for over a year, Indian investment banks seem to have regained their competitive edge with three entities featuring on the top 10 list of investment banks in Indian equity capital markets during the first seven months of CY13. The Indian banks have also been able to improve on their collective market share of the overall fund-raising pie.
Citigroup’s investment banking division, which has topped the list so far this year, was also ranked at the top in 2012, according to Bloomberg data. Citi has helped eight companies raise R6,075 crore this year and held a market share of 14.5% so far in 2013. Kotak Mahindra Capital ranked second with a market share of 9.2%, Axis Capital (formerly Enam Securities) ranked fifth with a share of 8.3%, and SBI Capital ranked seventh with a market share of 7.1% on the top 10 Indian investment banks' list.
Kotak conducted nine issues worth R3,842 crore, Axis did 14 issues worth R830 crore, and SBI did 10 issues worth R710 crore.
Market experts said that the recent flood of secondary market sales had helped shore-up revenues of investment banking firms and also improve their ratings. Most of the money was raised via mandatory stake sale and government disinvestment.
“The flood of OFS has certainly helped the industry, at a time when the capital market is yet to recover,” said V Jayasankar, senior executive director and head, ECM, Kotak Investment Banking. Last year, only two investment banks – JM Financial (ranked 5) and Axis Capital (ranked 10) — featured on the top 10 list due to little fund-raising activity in equity capital markets.
Data also showed an improvement in market share of Indian investment banks. So far in 2013, the market share of Indian investment banks versus their foreign counterparts stood at 37.9% against 17.3% and 36.2% during the first three quarters of 2012 and 2011, respectively. During January-September 2010, domestic investment banks dominated the equity capital markets, with more than 50% market share in their kitty.
Interestingly, Citi stood first during four out of the last five years. On an average, Citi held a market share of 17.62% during the previous five years. The US investment banking major also facilitated the ACC-Ambuja-Holcim deal, which will further enhance Citi’s position in the Indian equity capital markets.