The surge in capital raising came at a time when the benchmark equity indices of the country were clocking lifetime highs boosted by record foreign inflows and euphoric optimism for economic recovery.
Companies managed to raise $5 billion from follow-on equity offerings in the March quarter, up 16.5 per cent a year ago. At the same time, funds raised from initial public offerings jumped 99 per cent to $2.9 billion in the March quarter.
Financial services companies dominated the capital raising from the domestic equity market with 41.6 per cent share. The accelerated fund raising from financial services companies comes at a time when the Reserve Bank of India has repeatedly asked banks to buff up their capitals due to expectations of large bad loans from COVID-19 pandemic.
ICICI Bank led the underwritting business when it came to capital raising from the equity market 12.7 per cent market share followed by BofA Securities and Axis Bank.
In terms of merger and acquisitions (M&A) activity, the quarter was lukewarm with India-involved M&A deals rising merely 0.3 per cent from a year ago to $26.6 billion. At the same time, deal count fell 20.8% year-on-year during the March quarter.
India’s Inbound M&A activity grew 21 per cent from a year ago and reached $8.3 billion. The US was the most active foreign acquirers in India with $5.1 billion worth of deals, and accounted for 62.3 per cent market share of inbound M&A, Refinitiv report said.
The quarter was a tough one for investment bankers, as investment banking fee plummeted 33.7 per cent on-year to $194.5 million, making it the lowest start to a year since 2016.