Local IPOs have recently heated up to quite a frenzy. This is despite the economic slowdown brought by the deadly pandemic. All this has led to a rewarding year for Indian investment bankers.
Interestingly, Mumbai listings have raised as much as $10.2 billion in 2021. Moreover, banks involved in these offerings have churned out humungous fees of nearly Rs. 14 billion. This is a more than doubled amount that they had received in the earlier peak of 2017.
Want to know more about this interesting turn in events?
A Bumper Pot of Fees
Bankers were among the groups worst hit by the pandemic during April – May. Amid personal responsibilities, the group had to juggle a truckload of work-related liabilities as well. After all the tough times of the previous year, India is finally experiencing a meltdown.
The country is no stranger to the global IPO mania. Companies like tech startups, drugmakers, jewellers, etc., have raised a massive amount of $476 billion globally this year.
But what is driving these firms to go public?
Lower rates of interest, liquidity, and demand from retail investors spur these firms to roll out their IPO.
In 2021, as many as 64 Indian businesses have hit the capital markets. As a result, the stock rally helped the S&P BSE Sensex to reach a record. This benchmark is, moreover, Asia’s best performing market index in 2021.
Further, the equity capital markets head at Kotak Mahindra said that share sales could reach a whopping Rs. 1 trillion in 2021 for the first time.
He further mentioned that the bankers are working day and night. When the market seems this good, issuers will surely speed up their plans for listing.
An Interesting Startup Rally
The leading food delivery giant, Zomato, backed by Ant Group Co., lifted $1.3 billion through its IPO. The company also fetched the bankers with an enormous fee of around Rs. 2.4 billion.
In addition, Paytm, one of India’s leading digital payment platforms, has also filed to sweep up Rs. 166 billion.
What’s even more interesting is that a jumbo IPO is on the queue, lining up to woo the investors next year. The Government of India is planning to sell 10% of LIC. It will further seek a $109 billion valuation. This is all set to be India’s biggest IPO to date.
The pandemic has speeded up digital technology adoption around the world. India is no exception to that. This has helped bankers tremendously in arranging their schedules.
Commenting on this, a banker said that with the advent of growing technology in the workplace, they could devote more time to their families. This has led to a somewhat smooth work-life balance. However, he also mentioned that the crack still remains due to increased work pressure and constant zoom calls.
Work-life balance for investment bankers is indeed on a toss currently. But to make things easier, certain banks are offering attractive facilities including transport. A few of them are also cutting off on small IPOs. They are rather focusing on the bigger ones with more lucrative issuances.
Frequently Asked Questions
- By how much has Citigroup Inc. increased its hiring?
Citigroup Inc. has boosted its local crew by 25%.
- Which are the major 2021 IPOs?
The major 2021 IPOS include Zomato, One97 Communications, Policy Bazaar, Nykaa Ltd., Adani Wilmar Ltd., and many more.
- What is the decision of ICICI Securities in managing the IPO flooding?
The head of investment banking in ICICI Securities has decided to manage only offerings above 10 billion rupees.