Citigroup in India is expecting to deliver a blockbuster year in 2024 in terms of equity capital markets, and mergers and acquisitions (M&As) with a robust pipeline in both, as it comes off the recent listing of Hyundai Motor India, the largest initial public offer in the country.
The pace activity is also likely to roll over into 2025 and the outlook for the next several years is positive, senior Citi officials said in a media briefing. Its pipeline of transaction at the moment was much stronger than what it had been last year, they said. Citi had topped the charts in advising primary public market issuances as well as in M&As, they added.
Despite the lacklustre listing of the shares of Hyundai Motor India, there was significant interest from global MNCs to list in India. “We have a lot of other large MNC clients, who are keen to explore this opportunity,” said Rahul Saraf, Citi’s India Head of Investment Banking. “I think they are actually encouraged with the listing of Hyundai.”
Despite the size of the IPO at $3.3 billion, it did not really affect the overall markets in anyway, said Arvind Vashistha, India Head of Equity Capital Markets, pointing out that it was an indicator of the ability of the market to absorb ‘jumbo transactions’.
The quality of transactions in India had improved, as also the range and sophistication, and these factors were here to stay on a permanent basis, Saraf said.
Outbound M&As
Activity was being seen across the board and was not confined to a few large companies or some specific investors. He predicted that outbound M&As would see a big rise next year. A big trend was that the size of the transactions had increased “and again for us that’s very interesting because we get to play a more meaningful role in big transactions defined as $500, $750 million-plus,” Saraf said.
Apart from the Hyundai IPO, Citigroup has been involved with several big-ticket transactions such as the recent CD&R-Sanofi Consumer Healthcare India deal, BAT Plc selldown in ITC, TCS selldown for Tata Sons, the forthcoming IPO of Swiggy, RIL acquisition of Star India, and Brookfield buying American Tower’s India assets.
The risks arising from geopolitical conflicts and tensions, from volatile commodity prices and interest rates were being withstood by the market, said Vashistha. He said the IPO boom in India was being driven by the growth in the Indian economy, earnings growth and participation of investors across the board.