OVERALL INDIA BOND ISSUANCE DROPS 48.6% AFTER RECORD HIGH IN 1Q2013
Primary bond offerings from Indian issuers stood at US$10.8 billion during the first quarter of 2014, down 48.6% after reaching a record start last year (US$21.0 billion). Total proceeds this quarter also declined 24.1% sequentially compared to fourth quarter of 2013 (US$14.2 billion).
Indian companies tapping the offshore US dollar-denominated bond markets this year totaled US$2.0 billion, a 64.0% decrease after last year’s best-ever first quarter period (US$5.7 billion).
Axis Bank topped the ranking for India-issued bonds underwriting in the first quarter of 2014, with related proceeds of US$1.7 billion from 35 deals and accounted for 15.9% of all the bond offerings by Indian issuers.
According to fee estimates from Thomson Reuters/Freeman Consulting, capital raisings through bond issuance by Indian companies generated imputed fees worth US$14.4 million this quarter, a 61.9% decline from the comparative period last year.
With estimated fees of US$1.4 million, HSBC Holdings took the lead for India bonds imputed fee ranking this year, and captured 9.7% market share of the fee pool.
FINANCIALS TAKE THE LEAD WITH 70% MARKET SHARE
The majority of the bond proceeds were issued by companies from India’s Financials sector with 69.7% market share, or US$7.5 billion, even if the value of proceeds declined by 38.5% from the same period in 2013 (US$12.2 billion). The Consumer Staples sector came in second and captured 12.1% of the market share with US$1.3 billion worth of proceeds, a 37.1% growth compared to the proceeds during the first quarter of 2013.
INDIAN RUPEE BONDS DOWN 36.5% YTD
Indian Rupee-denominated bond proceeds amounted to INR530.9 billion in the first quarter of 2014, a 36.5% decline compared to the record-high quarterly level attained during the first quarter of 2013 (INR836.6 billion). Total proceeds also saw a quarterly decline of 16.4% from the fourth quarter of 2013 (INR634.8 billion).
The Financials sector accounted for 62.8% of the Indian Rupee bond markets where proceeds amounted to INR333.6 billion from 79 new issues, down 34.6% in proceeds from the first quarter of 2013 (INR510.5 billion). The Consumer Staples sector, with INR80.0 billion in proceeds, grew 53.8% from the first quarter of last year, and accounted for 15.1% of the market share.
Asia Pacific’s aggregate local currency bond volume amounted to US$131.4 billion so far this year, down 29.1% from the first quarter of 2013. Indian Rupee-denominated bonds accounted for 6.6% of Asia’s local currency bond market share while Chinese Yuan captured the biggest market share with 39.1%.
Thomson Reuters India ECM Review for first quarter 2014
A SLOW START FOR INDIA EQUITY, EQUITY-LINKED ISSUANCE
Equity and equity-linked issuance by Indian companies raised a total of US$2.43 billion during the first quarter of 2014, a 55.3% decline from the comparable period in 2013, and the lowest start to a year since 2011 (US$2.39 billion).
Follow-on offerings captured majority of India’s equity capital markets activity with US$2.42 billion worth of proceeds, a 54.6% decrease from first quarter of 2013, and accounted for 99.4% of the market activity this year. This is the lowest first quarter period in terms of proceeds amount since 2011 when volume fell to US$2.15 billion.
Initial public offerings (IPO) totaled US$13.50 million, a significant drop of 84.0% in proceeds compared to the first quarter of 2013 (US$84.30 billion). This is the lowest quarterly level in terms of proceeds since first quarter of 2009 (US$4.90 million).
Citi and JP Morgan are tied at the top spot for India’s equity and equity-linked League Table in the first quarter of 2014. Citi and JP Morgan each captured 22.0% of India’s ECM activity with related proceeds of US$ 535.7 million from 3 deals.
According to estimates from Thomson Reuters/Freeman Consulting, India’s equity and equity-linked capital raisings generated imputed fees worth US$9.44 million so far this year, a 50.2% decline from the comparative period last year.
JP Morgan and Citi were tied at the top spot and both took the lead for India ECM imputed fee ranking this year, as the two banks each registered 18.5% market share of the fee pool.