India’s investment banking fees in January-March quarter fall to lowest since 2016: Refinitiv

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Bombay : Investment banking activities in India generated $179.7 million in the first quarter of 2022, a decrease of 33.5% compared to the same period last year, making it the most low in the first quarter since 2016, according to a report from financial markets tracker Refinitiv.

ECM (equity capital markets) underwriting fees reached $40.9 million, down 43.2% from a year ago, according to the report, while DCM (equity markets) underwriting fees debt capital) totaled $49.1 million, down 23.9% from a year ago – the lowest start to a year since 2016. M&A advisory fees completed fell 17.9% from a year ago and totaled $62.2 million, while syndicated loan fees were down 52.5% from the comparable period last year and generated $27.4 million in the first quarter of 2022.

“As global deal-making fell to its lowest open period since 2020, the onset of the Covid-19 pandemic, M&A activity involving India got off to a strong start as Q1 period hit a four-year high Technology and healthcare acquisition, availability of private equity and ample cash reserves, and historically low interest rates were key drivers of M&A growth so far this year,” said Elaine Tan, senior analyst at Refinitiv, an LSEG firm.

“High-tech acquisitions involving India accounted for the majority of the market share at 22% and totaled $6.6 billion, double the amount from a year ago, and witnessed the start of strongest year on record for the sector. Private equity deals targeting Indian companies also kicked off at a record pace and amounted to $9.8 billion, with high-tech sectors capturing the majority of business with 28.7% market share With India’s strong innovative start-up economy, deal-making in tech and tech-adjacent sectors could continue to drive business, despite challenges posed by market volatility fueled by geopolitical tensions,” added Tan

Global IPO activity has slowed significantly amid market volatility and global strife, the report notes.

“In line with the global trend, India’s IPO activity declined by 57.1% after getting off to a record start last year, and the number of IPOs dropped by 14, 8% year over year. Despite a healthy pipeline, including the next planned IPO of Life Insurance Corp (LIC), the cloudy landscape as well as the scrutiny of Indian IPOs could dampen activity,” Tan said.

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