India Special Report 2010 League Tables

Foreword Before August 19, the last time the Sensex index touched 18,400 was just after its all-time peak of January 2008. India’s capital markets had just recorded the country’s biggest IPO and confidence was running high. Of course, the Reliance Power listing proved to be a disaster and the markets collapsed. Is it different this time? India has much to crow about. Solid economic growth and a stable political environment have combined to draw crowds of international investors to its capital markets, while the country’s corporate leaders are...

India today looks as if the financial crisis never happened - and on the ground, one can argue it did not. “In the past six to 12 months, it has become very clear to us that the growth dynamics in India didn’t slow down a lot,” said Rahul Bajoria, an economist covering India for Barclays Capital. He is expecting growth of at least 8% this year. “I think most drivers, like domestic demand and private consumption, are likely to remain on a pretty strong footing.” The biggest challenge facing Indian policymakers today is not spurring the economy...

India’s rupee loan markets rose to the occasion as able substitutes for offshore liquidity in the aftermath of the global financial crisis. Offshore lenders have since returned in numbers, but the country’s domestic markets remains important sources of funding, especially for lower-rated borrowers and for infrastructure projects. The international capital markets are the first port of call for any Indian company eyeing a major overseas acquisition. They offer the depth, breadth and volume essential for a successful execution of an overseas...

State divestments have dominated India’s primary equity capital markets in 2010, with the government raising Rs220bn (US$4.7bn) from share placements in the first three months of 2010. The scale of the fundraising highlighted the depth of demand among global investors for emerging market assets, but the exercise also revealed a rare degree of flexibility on the part of the government. Bankers now see few obstacles in the government’s path as it looks to raise about US$9bn in the fiscal year ending March 2011. “The success of the divestment...

International lenders have become increasingly dependant on mergers and acquisitions to drive their Indian lending business. Two slow years restricted lending opportunities, but Indian companies are once again turning to the offshore markets for expansion. Two big-ticket transactions are in the limelight at the moment, marking somewhat of a revival of the acquisition financing boom that saw India catapult to the forefront of activity in the region. Bharti Airtel is in the market with a US$7.5bn loan to support its purchase of Zain’s African...

The growth in infrastructure-related financing has been a boon to India’s domestic lenders, but the rupee bond market has offered limited opportunities. Regulators have been trying to introduce changes to help deepen the corporate bond markets, but much more needs to be done. The first key issue to address is on the demand side: Indian companies view the bond markets as only a secondary option over the loan markets. Only if this attitude is changed will the market really develop. “Indian corporates are quite willing to access the domestic...

The Reserve Bank of India has sparked a furious debate with a proposed new framework for securitisation. The draft rules for banks and non-banking financial institutions are open for discussion, but offer more than a sneak preview of the final rules that market participants expect to be enacted before the end of the year. The debate focuses on the RBI’s introduction of two controversial concepts - a minimum holding period and a minimum retention requirement. To some extent, the RBI move mirrors what is happening in other, more developed markets...

The intense competition in India’s investment banking sector is both a cause and an effect of the rapid expansion of the country’s corporate market. Acquisitions galore are being more than matched with the furious competition among top banks that are falling over themselves to book Indian business, driving down fees to among the lowest in the emerging market universe. Across the board, local investment banks are competing with their international counterparts: from the big commercial banks that bring their balance sheets to any deal to the...

Standard Chartered Bank’s Indian depositary receipt (IDR) listing in June was the first time a foreign issuer had bothered to list in India. It also was not about the money, but about strengthening the brand and cementing a local presence. The bank met its objectives in the end, but, for a while, the deal looked touch and go. During the first few days of bookbuilding, the deal looked to be struggling to get over the finishing line, but made it in the end as investors came in at the11th hour. A day before books closed, the Rs25bn (US$537m)...

The £1.3bn (US$2bn) IPO of Essar Energy was far from an assured success. The deal was launched into a European equity market still finding its feet, while the complexity in unravelling Essar Energy from the Essar Group also put off some investors. The company needed to revise its price target to get the deal over the line, but Essar’s ability to weather a stormy market should encourage others to follow suit. Essar was the first Indian firm to head to the main market in London since Vedanta Resources floated in December 2003. In between,...

Few share placements in India attract the kind of international attention that was lavished upon Adani Enterprises in July. Launched at US$500m and capped at the final size of US$850m, the deal drew orders from a who’s who of global investors, becoming the second largest qualified institutional placement on record in India and the biggest for more than two years. More remarkably, over 93% of the deal went to foreign institutional investors, an unusually high percentage for an Indian issuer - even one so well known. Foreign funds saw the deal as...