Equity capital market league tables see a significant reshuffle at the top

Jefferies, IIFL, and JM Financial — none of which were in the top five last year — have now claimed the top spots in the league tables for equity capital markets (ECM) during the first nine months of calendar year 2023 (CY23), a period characterised by small- and mid-sized transactions.

This shift marks a significant change, with these firms outperforming the bulge-bracket investment banks.

According to data provided by Refinitiv, Jefferies leads the domestic ECM market, having handled share sales worth $2.3 billion, representing 12.4 per cent of the total volume of $18.4 billion for ECM transactions.

These transactions encompass initial public offerings (IPOs), block deals, and qualified institutional placements (QIPs).

The New York-based investment bank secured its top position by exclusively brokering the $1.87 billion investment by US boutique investment firm GQG Partners in four Adani Group companies in March.

In addition to Adani’s share sales, Jefferies played a pivotal role in other key transactions, including the $530-million IPO of Mankind Pharma and the $280-million QIP by Brookfield India Real Estate Trust (REIT).

Meanwhile, IIFL Holdings has made a remarkable ascent from the 10th position to the second position in the league table by handling 16 deals worth $1.94 billion during the first nine months of CY23 —nearly 3.4x the volume from the same period last year.

Apart from its involvement in the Mankind Pharma IPO and Brookfield REIT, the Mumbai-based IIFL also played a crucial role in the $385-million IPO by Nexus Select Trust, India’s first retail-focused REIT, and the $600-million QIP by Union Bank of India.

Nipun Goel, president and head of investment banking at IIFL Securities, attributed the group’s robust performance this year to its strong distribution network across investor classes and exceptional execution capabilities.

He expressed confidence that the strong deal momentum will continue, observing, “We are bullish on the prospects of ECM markets. Domestic liquidity and flows have been strong over the past several years in the equity markets.

"Foreign investors are also eager to increase their exposure to India due to India’s favourable growth dynamics in the short term as well as the medium term.”

The third position was claimed by JM Financial, which managed transactions worth $1.8 billion — 4x more than last year when it held the 11th position.

This Mumbai-based investment bank was involved in two dozen ECM deals, the most among the top 10 ranked banks. JM Financial played a significant role in the recently concluded IPO of JSW Infrastructure, which raised $335 million by issuing new shares.

It also handled the Coal India offer for sale, through which the government raised $500 million by divesting a 3 per cent stake.

JPMorgan improved its ranking by one notch, securing the fourth position this year, while Kotak Mahindra Bank, which held the top position during the first nine months of 2022, slipped to the fifth position.

Citibank’s ranking declined from three last year to 10 this year, and ICICI Securities’ ranking slid from four to eight, according to data provided by Refinitiv.

Industry insiders noted that large banks such as Citibank, Morgan Stanley, and Kotak Mahindra Bank focus on big-ticket deals, creating opportunities for other players to secure smaller mandates.

The average deal size for the 30-odd IPOs that entered the market during the first nine months of CY23 was just $100 million, nearly half of the $190 million average deal size for IPOs in the previous calendar year.