Even as the equity markets haven’t had a good start to the year so far, India’s largest investment banking firm – Kotak Investment Banking expects the IPO market to remain robust in 2023. The investment banking house is pegging a 30 per cent year-on-year growth (y-o-y) (by value) in IPOs this year and is confident that India will remain an important market for equity fund raises. However, this growth may be on the back of a low base given that in 2022 (CY22) equity fund raising shrunk by 43 per cent y-o-y to $16.4 billion. If the mega IPO of Life Insurance Corporation of India is excluded, the picture may be further muted.
The number of IPO deals also plunged from 61 in CY21 to 37 last year, while the secondary market offerings (rights issues and qualified institutional placements) also took a beating, falling by 89 per cent and 74 per cent y-o-y respectively in 2022.
However, India’s ranking in the global advisory activities stood at 4th position (in terms of number of deals) in 2021, up from the ninth spot in 2017. “I don’t see us getting displaced majorly this year,” said S Ramesh, MD & CEO, Kotak Investment Banking. Advisory transactions - mergers, acquisitions and restructuring — rose 28 per cent y-o-y to $185 billion in CY22 with the HDFC Ltd – HDFC Bank merger being the biggest transaction. Inbound investments by private equity and venture capital (PE/VC) also remained strong at $47 billion with digital and consumer tech companies commanding a giant share of the inflows.
ECM ranking
Meanwhile, Kotak has wrapped up 2022 on a good note, taking the ninth position in the Asia Pacific ECM Ranking. Along with ICICI Bank (at 19th position), there were two representatives in this list. Domestically, Kotak took the top slot in the league tables with 12 deals in the IPO market and 21 deals in the secondary market.