Sebi wakes up to India IPO complaints

The Securities and Exchange Board of India is beginning to shift its attention from retail to institutional investors in bid to kick-start the country’s uninspiring IPO market.

  • 08 Jan 2014
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At the end of a dire 2013, Sebi began meeting with the heads of investment banking in India to discuss ways in which it could invigorate the market.

Last year, the country's initial public offering (IPO) volume totalled US$232 million, according to Dealogic data - US$165 million of this was issued solely by telecommunications company Just Dial.

“The regulatory environment is not unfriendly but controversies in government circles over the past two years coincided with difficult local and global macro problems, so it was a perfect recipe for disaster,” said one Mumbai-based head of India equity capital markets (ECM) at a global bank.

The main problem is that institutional investors tend only to be allowed a 50% share of the total book. Of this, only 30% can be allocated to anchor investors.

“Anchor investors take the lead in giving confidence on pricing and valuation so in an environment like this when we’re struggling to attract retail, why not give them a bigger stake," said an India ECM head at a US bank.

"The regulator is becoming aware of this and it’s something they want to prioritise.”

In the past, the regulatory focus has been on protecting the retail investor base. There has been much discussion, for example, about forcing companies to issue retail shares with a safety-net feature allowing investors to call the shares if they tank during the first six months of listing.

Also under discussion are tax-breaks for retail investors, and some bankers have even suggested that companies issue convertible bonds in tandem with an IPO to offer additional protection.

In addition to meeting with banks, Sebi has decided it will start to meet prospective issuers to tell them the regime is not onerous, and that the exchange will offer expedited clearing for transactions, said one Mumbai-based executive director at an international bank.

Finally the regulator has asked the Association of Investment Bankers to prepare a note on further advisable measures, he said.

However, regardless of regulatory improvements, many say the overwhelming problem is a lack of capital expenditure, which means there is little need for fresh primary capital.

In terms of the pipeline, very few new mandates are being given for onshore listings and many old mandates have expired. However, several businesses in a variety of sectors are beginning to employ banks for overseas IPOs – mostly in Singapore and the US, following a regulatory change at the end of last year.

  • 08 Jan 2014

Bookrunners of International Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 24 Apr 2017
1 Citi 23,438.27 103 9.46%
2 JPMorgan 22,204.62 91 8.96%
3 HSBC 21,532.30 124 8.69%
4 Deutsche Bank 14,929.24 54 6.02%
5 Standard Chartered Bank 12,864.13 73 5.19%

Bookrunners of LatAm Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 16 May 2017
1 Citi 7,891.26 23 14.39%
2 JPMorgan 6,469.14 26 11.80%
3 Morgan Stanley 4,879.44 17 8.90%
4 HSBC 4,803.80 12 8.76%
5 Bank of America Merrill Lynch 4,270.90 19 7.79%

Bookrunners of CEEMEA International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 23 May 2017
1 JPMorgan 12,475.95 47 12.71%
2 Citi 12,387.42 44 12.62%
3 HSBC 8,280.73 41 8.44%
4 Deutsche Bank 6,905.70 15 7.04%
5 Standard Chartered Bank 5,686.63 26 5.79%

EMEA M&A Revenue

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 02 May 2016
1 JPMorgan 195.08 50 10.55%
2 Goldman Sachs 162.26 37 8.77%
3 Morgan Stanley 141.22 46 7.64%
4 Bank of America Merrill Lynch 114.20 33 6.18%
5 Citi 95.36 35 5.16%

Bookrunners of Central and Eastern Europe: Loans

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 23 May 2017
1 Bank of America Merrill Lynch 929.36 4 8.03%
2 ING 872.17 7 7.53%
3 SG Corporate & Investment Banking 839.92 7 7.25%
4 Credit Suisse 832.77 5 7.19%
5 UniCredit 793.78 7 6.85%

Bookrunners of India DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 24 May 2017
1 AXIS Bank 3,917.94 61 15.95%
2 Trust Investment Advisors 3,216.02 74 13.09%
3 ICICI Bank 2,356.13 61 9.59%
4 Standard Chartered Bank 2,261.01 21 9.21%
5 HDFC Bank 1,552.43 41 6.32%