Equity capital market fee pool at 17-year high as activity up 2.5x

The fee pocketed by investment banks for handling equity share sales stood at $244 million during the first half of calendar year 2024.

This was the highest first half figure since 2007, according to LSEG Data & Analytics, a provider of financial markets data.

Capital mobilised via equity capital market (ECM) activity jumped 2.5 times to $29.5 billion — the highest-ever semi-annual total in terms of proceeds.

ECM comprises initial public offerings (IPO), follow-on offerings, such as block deals, follow-on public offerings (FPOs) and qualified institutional placements (QIPs).

Indian firms raised $4.4 billion — almost double that of the first half of 2023 — with the number of issues rising 71 per cent.

Follow-on offerings accounted for 85 per cent of the total ECM proceeds at $25.1 billion during the first half. The number of offerings rose 56.4 per cent year-on-year (Y-o-Y).

Among the largest ECM transactions during the year were Vodafone Idea’s $2.16-billion FPO, BAT Plc’s $2.11-billion disinvestment in ITC and Vodafone Plc’s $1.8-billion stake sale in Indus Tower.

“Industrials sector accounted for the majority of the nation’s ECM activity with 21.4 per cent market share worth $6.3 billion in proceeds, a 96.2 per cent increase from a year ago.

"Telecommunications captured 16.6 per cent market share as proceeds grew significantly compared to the first half of 2023.

"Financials rounded out the top three and captured 14.5 per cent market share, raising $4.3 billion, up 57.2 per cent Y-o-Y,” said LSEG in a report.

Meanwhile, Citi topped the ECM league table as it handled $3.3 billion worth of proceeds and garnered a market share of 11.3 per cent.

Jefferies, Kotak Mahindra Bank, IIFL and BofA Securities were close contenders for the second position with each cornering a market share of between 8.2 per cent and 9.2 per cent.

Overall, estimated fees generated by investment banking activities fell 11 per cent to $530.4 million during the first half of 2024.

Mergers and acquisition (M&A) activity with India-involvement totalled $37.3 billion in the first half of 2024.

This is a 4.4 per cent increase from a year ago, the highest in the first-half period since 2022.