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Investment banking fees plunge 34% in Q1 to $194.5 million: Report – Times of India



Investment banking fees plunge 34% in Q1 to $194.5 million: Report - Times of India


MUMBAI: Despite a record year for primary share issues, investment banking activities declined in the first quarter of the year, pulling down their fees by almost 34 per cent to $194.5 million and making it the lowest start to a year since 2016, according to a report.
However, the ECM (equity capital markets) underwriting fees reached a three-year high of $63.8 million, growing 7.2 per cent over the same period in 2020, according to the data collated by Refinitiv, which is owned by LSEG (London Stock Exchange Group).
According to the report, at $194.5 million, the fee collected by I-bankers is the lowest since 2016 when it stood at $127.4 million. On an annualised basis, this was 33.7 per cent down from the Q1 of 2020, the report said.
The biggest drop was loan syndication fees that more than halved (down 50.5 per cent) to $44.7 million, followed by M&A advisory fees which plunged 47 per cent to $33.1 million and DCM (debt capital market) underwriting fees that fell 34.9 per cent to $53.0 million.
SBI Caps took the top spot in overall investment banking fee league table with 13.8 per cent wallet share, collecting $26.9 million.
In terms of M&As fees, Morgan Stanley topped the league handling M&As worth $5 billion or 18.9 per cent market share, followed by Goldman Sachs and BofA Securities with 15.2 per cent and 14.7 per cent market share, respectively.
ICICI Bank led the ranking for ECM underwriting, handling $927.5 million in related proceeds and 12.7 per cent market share, followed by BofA Securities and Axis Bank with 12.2 per cent and 11.3 per cent market share.
M&As reached $26.6 billion in the first quarter and were flat, while deal count fell 20.8 per cent year-on.
There were six deals above $1 billion during the first quarter, with a cumulative total of $15.9 billion, compared to $10.4 billion from four deals last year.
Domestic M&As inched up 1 per cent to $15.8 billion, primarily led by Piramal Capital & Housing Finance’s bid to acquire Dewan Housing Finance through the bankruptcy process for a total $4.711 billion, making it the largest deal so far this year.
In-bound M&As grew 21 per cent to $8.3 billion. The US-based companies were the most active foreign acquirers totalling $5.1 billion deals, or 62.3 per cent of all inbound M&As.
On the other hand outbound M&As fell 40.6 per cent to $1.8 billion, despite a 17.1 per cent increase in volume.
Britain was the most targeted nation in terms of value by Indian companies with six deals worth $1.5 billion, or 79 per cent of all outbound deals, while the US saw the most number of acquisitions with 11 deals worth $196.5 million.
Equity capital markets (ECM) raised $7.3 billion in Q1, up 13.4 per cent, which was the highest start to a year since 2018 when it stood at $8.8 billion.
Follow-on offerings accounted for 67.9 per cent of ECM proceeds, raising $5.0 billion, up 16.5 per cent.
Initial public offerings totalled $2.3 billion, a 98.7 per cent jump in proceeds, making it the highest first quarter since 2018, led by IRFC‘s $635.50 million IPO in January.
On the debt capital market, bond offerings started slow and amounted to $22.9 billion, down 10.5 per cent and making it the lowest first quarter since 2018 when it was $18.4 billion.
Axis Bank topped the ranking for bonds underwriting worth $2.5 billion from 30 issues or 11 per cent market share.


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