India Equity House: JP Morgan

IFR Asia Awards 2021
3 min read
Asia
S Anuradha

Standing out

In a year when India’s equity capital market was under the spotlight with unprecedented competition, JP Morgan continued its dominance by leveraging its global capabilities.

When the Chinese government started to tighten scrutiny of the country’s technology giants around mid-year, investors were keen to look for high-growth alternatives.

With Chinese deals on hold, foreign banks marched into India in the hope of diversifying their revenues and muscling into upcoming tech deals.

JP Morgan continued to be among the top players in India ECM thanks to its ability to list companies at home and abroad, capture market trends and win important deals. It earned US$3.8bn of league table credit for a 10.5% market share, making it the top foreign bank, according to Refinitiv data.

It brought two landmark transactions – Paytm’s Rs183bn (US$2.47bn) IPO, lndia’s largest, and the US$1.03bn Nasdaq IPO of Freshworks, the first overseas tech listing from an India-linked company in over a decade.

JP Morgan was instrumental in bringing international anchor investors to provide momentum to the IPO of mobile payments company Paytm (officially named One 97 Communications), since they were more familiar with the industry than local investors.

The bank also helped Freshworks price its deal at US$36 per share, above a range of US$32–$34 that had already been revised upward.

JP Morgan saw opportunities to launch deals in some industry sectors even when conditions appeared far from ideal.

It arranged the Rs56bn IPO of Sona Comstar, the country’s first electric vehicle-related float, amid a global correction in the sector. JP Morgan, as a joint bookrunner, persuaded investors to focus on the long-term potential of the industry and priced the deal at a hefty 2021 price to earnings multiple of 77.60 compared with the industry average of 73.08.

The bank also took advantage of the nascent recovery in the property sector to launch two deals in Macrotech Developers. In April, during India’s second wave of the Covid-19 pandemic, it helped sell a Rs25bn IPO, the first real estate float in over a decade. In November, JP Morgan was one of the two IPO banks (out of 10) to lead a Rs40bn qualified institutional placement for Macrotech at Rs1,170 per share, or a 141% premium to the IPO price of Rs486.

JP Morgan’s growing influence helped it win spots on deals that were traditionally solely managed by other banks.

A highly prized deal was the Rs68bn block in HDFC Life Insurance. JP Morgan was picked as joint bookrunner by vendor Standard Life, which had launched seven transactions in HDFC Life since 2019 with another foreign bank. Standard Life also went with JP Morgan as sole bookrunner on a Rs31bn block in HDFC Asset Management Co.

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