Investment bankers expect IPO momentum to continue

Financial institutions, tech companies have dominated IPO markets in CY21:

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Calendar Year 2021 created history, with more IPOs in a year than in the last 3 years combined, both in number of listings and amounts raised. CY21 saw the highest ever IPO volumes in India. A record-breaking ₹1.35 trillion was raised by 65 companies during the CY21 by way of IPOs, the highest in the history of the Indian capital market. In CY21, IPO volumes surged to over $15.3 billion, as against $4.2 billion in CY20, according to a Kotak Investment Banking report.

Kotak Mahindra Capital Company executed a number of IPOs as Book Running Lead Manager (BRLM) in FY21 and in the first 3 quarters of FY22. Kaushal Shah, ED & Head, ECM (equity capital market), updates: “Kotak has successfully completed 17 IPOs during 1st April 2021 to 31st December 2021 as against 5 IPOs for corresponding period last year.”

ICICI Securities completed 20 IPOs as the BRLM during the current fiscal April to November 2021. Ajay Saraf, Head, Investment Banking & Institutional Equities, claims: “We are number 1 in terms of completed number of IPOs and number 1 in terms of amount of funds raised through IPOs.”

25% GROWTH IN IB FEE

In CY21 Indian investment banking (IB) fee pool for the first time crossed $1 billion, a 20-25% growth over 2020. The rise in fee has been on account of rise in volumes as well as rise in margins. Surge in business has also helped margins improve in the investment banking fee pool. Massive surge in IPOs in CY21, has continued to help in the rise of the Investment Banking (IB) fee pool, as per the Kotak IB report.