Volatility in local share markets have hit India Inc's equity fund-raising plans, with the total deal value this year set to fall below the level seen in 2008.
"This year has been challenging for the primary market. Around $9 billion has been raised so far, and we don't expect much in the last (October-December) quarter," said Sanjay Sharma, head (equity capital markets), Deutsche Bank Group, India.
In the first eight months this calendar year, Indian companies raised $9.2 billion, compared with $29.9 billion raised in 2010, according to Dealogic data. In 2008, Indian companies raised $13.8 billion through equity issuances.
The fee earned by investment banks so far this year is estimated at around euro 52 million, compared with euro 238 million last year.
In 2008, investment banks earned euro 98 million by managing equity issuances of domestic firms.
The shrinking fee pool has also taken its toll on headcounts, with many banks shrinking their investment banking teams in the last few weeks.
"This would be the most difficult year for equity capital markets in a long time. With PE (price earnings) multiples contracting, promoters are also weary of selling equity. Foreign institutional investors have backed out from emerging markets, including India," said Tarun Kataria, chief executive, Religare Capital Markets, India.
Bombay Stock Exchange's benchmark index, Sensex, has plunged 17.46
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