India Equity House: Kotak Investment Banking
In a bumper year for India’s equity capital market, Kotak Investment Banking’s deep relationships with issuers and investors, at home and internationally, as well as its skill in navigating India’s regulatory environment, helped it stand out amid fierce competition.
2024 was a record year for India ECM, with the country eclipsing China as the top market in Asia ex-Japan.
Despite intense competition from domestic and international banks, Kotak led the pack by topping the India ECM league table with 66 deals for a total volume of US$8bn, according to LSEG data.
One key theme was global companies listing their Indian units to take advantage of high valuations and a buoyant IPO market.
South Korea’s Hyundai Motor picked Kotak to work on its Indian unit’s IPO, the only Indian bank in a five-bank syndicate. Kotak helped navigate the Indian regulatory ecosystem and provided valuable feedback from local investors, before successfully delivering India’s largest-ever IPO for Hyundai Motor India, in a Rs278.7bn (US$3.2bn) deal.
Kotak was also one of the arrangers of the Rs43bn IPO of the Indian unit of Blackstone-owned International Gemmological Institution Group.
Its other landmark IPOs included the largest technology IPO of the year for Swiggy (Rs113bn) and India’s first float of an electric vehicle company, Ola Electric Mobility (Rs61.5bn), as well as big deals for Bajaj Housing (Rs66bn) and Vishal Mega Mart (Rs80bn).
Swiggy’s deal came after a string of weak listings and competed against rival Zomato for capital. Kotak advised Swiggy to move quickly to launch the float first, and price at a level to allow for a good aftermarket.
In India’s major IPOs, Kotak tended to bring in the most anchor investors, including sovereign wealth funds and international long-only investors.
It was a record year for qualified institutional placements as the Indian corporate sector needed growth capital. Kotak managed the QIPs of Varun Beverages (Rs75bn), automobile component maker Samvardhana Motherson International (Rs65bn of shares and convertible debentures) and Godrej Properties (Rs60bn).
Kotak’s ability to distribute to high-quality institutions was highlighted by the Mankind Pharma and Torrent Power QIPs, in which all the shares were sold to long-only investors. The anchor tranches of the IPOs of Vishal Mega Mart and Sai Life Sciences also comprised only long-only investors.
This persuaded controlling shareholders and private equity investors to place their faith in Kotak for multiple transactions.
A group of shareholders in Five-Star Business Finance, including TPG Asia, Norwest Venture Partners and Peak XV Partners, were repeat customers for Kotak with a Rs45bn block, having sold two blocks in 2023.
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