Did not figure in last year’s rankings as it did not do any QIP or IPO.
Citi Global Markets has overtaken Morgan Stanley to take the top slot in domestic equity offerings as competition for raising equity capital for Indian companies intensifies.
Equity capital market transactions have been the mainstay of investment banks this year as the merger and acquisition (M&A) advisory business slowed significantly. Banks earn 1-2 per cent of the deal size as commission.
According to Bloomberg data, between January and November 16, there were 64 capital market transactions worth Rs 57,300 crore as against 50 deals worth Rs 22,700 crore in the corresponding period last year.
Reliance Industries, L&T, UltraTech Cement, United Spirits, Pipavav Shipyard and Oil India were some of the clients that tool Citi’s help to raise Rs 9,682 crore in 17 issues, overtaking Morgan Stanley, which raised Rs 8,842 crore in 11 issues.
Citi did not figure in last year’s rankings as it did not do any qualified institutional placement (QIP) or initial public offering.
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“In 2010, we expect the Indian equity capital market to do even better in terms of value than in 2007,” said Ravi Kapoor, managing director, capital markets, Citigroup Global Markets. At the height of the bull run in 2007, Indian companies raised Rs 70,200 crore in about 144 transactions. Morgan Stanley refused to comment.
A host of companies, including large public sector players such as NTPC, have lined up public issue of shares to raise capital and enable the government to disinvest its holdings. Most banks are making a strong pitch for this business, though the fee here is lower than what private companies offer.
| NUMBER GAME Bloomberg League | ||||
| Rank | Underwriter - 2007 | Mkt Share(%) | Amount INR (Bln) | Issues |
| 1 | Kotak Mahindra Capital Co | 13.40 | 9,376 | 26 |
| 2 | Citi | 12.30 | 8,620 | 18 |
| 3 | Merrill Lynch & Co | 11.00 | 7,696 | 11 |
| 4 | Enam Securities Pvt Ltd | 10.10 | 7,103 | 22 |
| 5 | JM Financial Ltd | 7.50 | 5,297 | 11 |
| Rank | Underwriter - 2008 | Mkt Share(%) | Amount INR (Bln) | Issues |
| 1 | Deutsche Bank AG | 13.10 | 2,991 | 4 |
| 2 | Kotak Mahindra Capital Co | 12.00 | 2,732 | 7 |
| 3 | ICICI | 10.10 | 2,307 | 4 |
| 4 | ABN Amro Securities India | 9.00 | 2,045 | 2 |
| 5 | JM Financial Ltd | 7.90 | 1,801 | 4 |
| Rank | Underwriter- 2009 till 24 November | Mkt Share(%) | Amount Rs Crore | Issues |
| 1 | Citi | 16.90 | 9,682 | 17 |
| 2 | Morgan Stanley | 15.40 | 8,842 | 11 |
| 3 | Kotak Mahindra Capital Co | 9.00 | 5,179 | 12 |
| 4 | Deutsche Bank AG | 8.60 | 4,944 | 5 |
| 5 | Enam Securities Pvt Ltd | 7.20 | 4,155 | 6 |
| Source Bloomberg | ||||
Citi mentions a “double barrel” deal for India’s largest engineering company, Larsen & Toubro (L&T), as an instance of innovation to meet the client’s requirement. L&T raised $600 million in October through a $400-million QIP issue and $200 million of foreign currency convertible bonds. “Assuming the company continues to grow, the net realised capital is more favourable,” R Shankar Raman, executive vice-president. “It (the combination) balances the structure,” he said.
Last year, Deutsche Equities India had raised the highest amount, Rs 2,990 crore, in four domestic equity transactions. This year, it is at number four, having raised Rs 4,944 crore for Indian companies. Kotak Mahindra Capital Company, which came second in the league table last year, has slipped to number three, having raised Rs 5,179 crore in 12 transactions so far.