Investment banking activities generated $761.5 million in fees in the first nine months of 2021, down 5.4 per cent compared with the same period last year, data compiled by Refinitiv showed. The fee generated so far this year is the lowest in three years.
The decline in fee income was due to a drought in equity fund raising besides IPOs compared with last year. In 2020, banks and corporations had led the way in raising record sums from the primary market as they looked to bolster balance sheets to cushion the impact of the Covid-19 pandemic.
In 2021 so far, only $22.1 billion was raised from the equity capital market in India, representing a decline 33 per cent from the year-ago period. This was when deal offerings jumped nearly 66 per cent, but they were largely of small values.
The IPO market was a ray of hope for investment bankers as companies raised a record $9 billion in the first nine months.
“With a robust pipeline of IPOs such as the anticipated listing of Oyo Hotel & Homes, the market is poised to potentially exceed the all-time annual record set in 2017 ($10.8 billion),” Elaine Tan, Senior Analyst at Refinitiv.
Mergers and acquisitions have been another bright spot for investment bankers this year, as India-involved M&As hit a three-year high of $90.4 billion in the year so far. The value of M&As jumped over 35 per cent in the nine months, whereas deal counts saw a 10 growth.
Average deal value during the first nine months of 2021 totaled $105 million, up 14.4 per cent year on year, as 17 deals worth above $1 billion were announced during the first nine months, Refinitiv said.
India’s corporate sector also flexed its balance sheet strength as outbound M&As hit a three-year high at $4.5 billion, up 18.2 per cent year on year.
Morgan Stanley took the top spot on any Indian-involved announced M&A league tables, with $11.7 billion in related deal value or 13.0 per cent market share, Refinitiv said.