The year 2013 in terms of fund raising seems to be better than 2012, but the low deal flow is affecting the investment banking fee revenue. Core Invenstment Banking fee has generated $72 million in net revenue so far in 2013 YTD - the lowest YTD level seen since 2009 ($29 million) and down 3% year-on-year.
Mergers and Acquisitions and debt capital market saw their fee pool decline 26% and 25% year-on-year to reach $19 million and $24 million, respectively, said a report by Dealogic.
Indian issuers have raised a total of $5.3 billion in the equity capital markets (ECM) so far in 2013, down slightly on the $5.6 billion raised in the same 2012 period. Though compared to fourth quarter of 2012 it was down 13% ($6.2 billion), said a report by Dealogic.
ECM accounts for the bulk of India Core investment banking revenue with a 40% share with $28 million in 2013 year to date (YTD), up 79% year-on-year and represents the highest share level since 2010 (54% with $63 million).
The largest Indian ECM transaction so far in 2013 year-to-date (YTD) was a $2.1 billion follow-on for NTPC through bookrunners Morgan Stanley, Citi, Goldman Sachs, Deutsch Bank, Kotak Mahindra Bank and State Bank of India. The deal also marks the third largest Asia (ex Japan) ECM transaction so far this year and the largest Indian ECM deal since ONGC's $2.6 billion follow-on completed in March 2012
A total of $3.5 billion has been raised in the USD-denominated bond markets by Indian issuers so far in 2013 YTD, up 77% year-on-year and marks the second highest YTD level on record since 2007 ($3.6 billion). Volume was fueled by Bharti Airtel International's $1 billion US dollar-denominated high-yield bond completed on March 4th in what is the seventh largest dollar-denominated bond by Indian issuer on record and the largest HY bond in Asia (ex Japan) in 2013 YTD.
Despite the increase in USD-denominated issuance, total Indian DCM volume has fallen to $5.5 billion in 2013 YTD, less than half the record raised in the same 2012 period ($11.6bn) and the lowest YTD level since 2008 ($4.5 billion). The decline in volume was led by a fall in local-currency issuance which saw a 83% year-on-year decline to $1.6 billion in 2013 YTD.
India Inbound M&A volume stands at $3.4 billion in 2013 YTD, more than three times the $1 billion announced in the same period last year but volume still down on the record raised in 2007 YTD ($17.4bn). The US is the leading acquirer into India with $2.2 billion via 17 deals in 2013 YTD, up from just $191million in the same 2012 period. Mylan Inc's $1.9 billion bid for Agila Specialities Pvt announced in February is the second largest US M&A acquisition in India on record and the largest India-targeted M&A deal so far this year.
Brings India-targeted M&A volume to $5.4 billion in 2013 YTD, down 72% year-on-year and the lowest YTD volume since 2005 ($3.2 billion). The fall in volume is led by Domestic M&A with $2 billion in 2013 YTD, down sharply compared to the $18.3 billion announced in 2012 YTD.
Indian issuers have raised a total of $5.3 billion in the equity capital markets so far in 2013, down slightly on the $5.6 billion raised in the same 2012 period, and down 13% on 4Q 2012 ($6.2 billion).
