Indian investment bankers are set for their best year ever, collecting almost Rs 26 billion ($347 million) in fees from local initial public offerings that have reached an all-time high in 2021.
A little over 110 companies ranging from online grocers to food delivery and beauty startups listed their shares in Mumbai this year, raising almost $18 billion, according to data compiled by Bloomberg. The fees raked in by banks steering those first-time share sales are more than four times the previous record in 2017, figures provided by New Delhi-based Prime Database show.
“It was an extraordinarily busy year, something I haven’t seen in my 30-year career,” said Jayasankar Venkataraman, head of equity capital markets at Kotak Mahindra Capital Co. in Mumbai. “Investment bankers carried work home and they weren’t fully switched off.”
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The IPO surge, coming amid a rally in the benchmark local stock index that hit a record in October, was led by companies including One 97 Communications Ltd., Zomato NSE 1.69 % Ltd. and PB Fintech Ltd. The wave of listings in India has tracked the wider trend in Asia, where companies have raised about $181 billion this year, an unprecedented level.
One 97 offers digital payments services under the brand Paytm; Zomato is a food delivery startup; and, PB Fintech runs an online insurance market place called Policybazaar.
There are many more share sales lined up for next year in India besides the proposed mega listing by state-owned Life Insurance Corp. of India, which could raise at least Rs 400 billion ($5.3 billion).
The country’s biggest bank, State Bank of India NSE -0.62 %, could mop up about $1 billion by selling a stake in its mutual fund venture through an IPO. More Retail Pvt., a grocery chain backed by Amazon.com Inc., is looking at an offering of as much as $500 million. E-commerce firm and Walmart Inc. unit, Flipkart Online Services Pvt., and digital-education startup Byju’s Pte. are also preparing for first-time share sales.
Kotak Mahindra’s Venkataraman expects 2022 will see similar amount of fundraising or a little more. But risks such as the spread of the omicron variant of the coronavirus, rising inflation and interest-rate increases could damp the sentiment in the market, he added. The S&P BSE Sensex is already off its record Oct. 18 closing level.
