India's investment banking fees reach $1.3 bn in 2024, Kotak Mahindra leads

India's investment banking activities earned $1.3 billion in estimated fees during 2024, one per cent increase compared to last year.While certain segments, such as equity capital markets (ECM), witnessed substantial growth, others like mergers and acquisitions (M&A) faced notable declines, according to  Deals Intelligence, LSEG.

 

The ECM underwriting fees surged to $645.2 million,an 80% increase from 2023. This is the highest annual total recorded since tracking began in 2000, highlighting a robust resurgence in equity financing as companies capitalized on favorable market conditions.

 

Conversely, the debt capital markets (DCM) also showed positive performance, with underwriting fees reaching $261.2 million, reflecting a 5% increase from last year.

 

 

However, the investment banking landscape wasn't entirely positive. Syndicated lending fees plummeted by 43% year-on-year, generating only $138.3 million in 2024. This sharp decline suggests a tightening in lending conditions and a shift in corporate financing strategies.

 

Moreover, completed M&A advisory fees saw a significant drop of 42% from the previous year, totaling $250.7 million. The decline in M&A activity may point to cautious sentiment among

 

Kotak Mahindra Bank took the top position for overall investment banking fee ranking in India with a total of US$92.8 million, accounting for 7.2% wallet share of India’s investment banking fee pool.

 

M&A 

In 2024, deal making activity involving India witnessed the busiest year on record with number of announced deals witnessing at least 2,756 transactions, up 3.3% from a year ago. However, deal value fell to a four-year low and totaled US$80.5 billion, down 11.4% from a year ago as more deals were done in small-to-mid market sizes.

 

Target India M&A activity reached US$71.5 billion, down 13.6% compared to last year, making it the lowest annual total since 2020. Domestic M&A grew 14.4% year-on-year by deal count which totaled US$41.9 billion, a 27.5% decline from last year.

 

Inbound M&A grew 18.7% from a year ago and totaled US$29.6 billion. Outbound M&A activity reached US$8.3 billion, up 30.3% year-on-year. United States was the most active nation doing cross-border deals with India – both as target for outbound and acquiror for inbound activity.

 

Majority of the deal making activity involving India targeted the Industrials sector which totaled US$10.9 billion, down 22.8% compared to 2023 and accounted for 13.5% market share. Healthcare totaled US$9.8 billion, up 51.5% from 2023, capturing 12.2% market share. Financials rounded out the top three sectors with 11.7% market share, as deal value totaled US$9.44 billion, down 69.0% from a year ago.

 

Private equity-backed M&A in India amounted to US$11.3 billion, down 9.0% from a year ago, making it the lowest annual total since 2017.

 

EQUITY 

India equity capital markets (ECM) hit a record high and raised US$72.3 billion in 2024, up 112.4% compared to a year ago, surpassing the annual record set in 2020 by proceeds. Number of ECM offerings also saw a 42.5% increase year-on-year.

 

Initial public offerings (IPO) from Indian issuers reached an all-time high worth US$20.5 billion, up 176.0% compared to 2023, driven by a 40.0% jump year-on-year in number of IPOs. Follow-on offerings, which accounted for 71% of India’s overall ECM proceeds, raised US$51.6 billion, up 94% from a year ago. Number of follow-on offerings grew 45.3% year-on-year. This is the highest-ever annual total for India’s follow-on offerings by proceeds and number of deals.

 

ECM Issuance from India’s Industrials sector accounted for majority of the nation’s ECM activity with 23.4% market share worth US$16.9 billion in proceeds, a 190.9% increase from a year ago. Financials captured 13.2% market share as proceeds grew 7.5% compared to 2023. High Technology rounded out the top three and captured 9.6% market share, raising US$6.9 billion, a 67.6% increase compared to 2023.

 

"2024 has been a stellar year for India’s equity capital markets and IPO activity driven by enhanced regulations, strong investor confidence, and favorable market conditions. Total ECM proceeds more than doubled and reached an impressive US$72.3 billion, marking the highest-ever annual total since records began in 1980.

 

Indian IPOs raised a record-breaking US$20.5 billion, surpassing previous highs, led by major listings from Hyundai Motor India (US$3.3 billion) and Swiggy Ltd (US$1.3 billion). Number of IPOs also increased 40% from a year ago – the busiest year since the IPO frenzy during the mid-90s.  This year, India has established itself as a dominant player in the global IPO markets, with IPO listings in Indian exchanges accounting for 18% of the Global IPO proceeds, second to the United States (28% market share). IPO listings in China, which took the lead in 2023, fell to third place with 7.0% market share.  With a robust IPO in the pipeline, the momentum is expected to continue in 2025," said Elaine Tan, Senior Manager, Deals Intelligence, LSEG.

 

Additionally, follow-on offerings hit an all-time high in both total proceeds and the number of issues, as companies capitalized on strong market conditions by offloading stakes through block trades.

 

BONDS

  Primary bond offerings from India-domiciled issuers raised US$86.1 billion in 2024, almost unchanged compared to the bond proceeds raised in total last year.

Indian issuers from the Financials sector captured 82.4% market share and raised US$70.9 billion in proceeds, up 8.6% compared to last year. Energy & Power followed behind with 6.8% market share worth US$5.9 billion, up 68.6% from a year ago. Government & Agencies raised US$3.3 billion, down 19.9% from a year ago.

 

Axis Bank leads the ranking for India-issued bonds underwriting, with related proceeds of US$11.9 billion and accounted for 13.8% market share.