Equity capital market deal value falls to 8-year low

New Delhi: Activity in the Indian equity capital market suffered a significant slump as the deal value fell over 18 percent to an eight-year low of $ 7.3 billion this year so far, says global deal tracking firm Dealogic.

In the comparable period last year there were as many as 76 equity capital market (ECM) transactions which raised capital worth $ 9 billion.

The Indian ECM volume has reached $ 7.3 billion by way of 44 transactions till August 7 this year – the lowest year-to-date volume since 2004, when it stood at $ 5.9 billion, Dealogic said.

[caption id=“attachment_411013” align=“alignleft” width=“380”]  This is the lowest volume since 2003 and down 83 percent compared with 2011 year-to-date period when $ 775 million was raised via three deals. AFP[/caption]

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Oil & Natural Gas Corp’s $ 2.6 billion follow-on via Citi, Bank of America Merrill Lynch, HSBC, JM Financial Group, Morgan Stanley and Nomura was the largest Indian ECM transaction this year so far.

The Indian ECM bookrunner ranking till August 7 2012 was led by Citi with a 39.9 per cent share, followed by HSBC and Morgan Stanley with 8.6 per cent and 7.7 per cent share, respectively.

Meanwhile, Indian ECM convertible volume totaled $ 130 million via just one deal – Amtek India’s $ 130 million issue via Standard Chartered Bank.

This is the lowest volume since 2003 and down 83 percent compared with 2011 year-to-date period when $ 775 million was raised via three deals, Dealogic said.

“The peak year for Indian convertible issuance was in 2007 YTD when $ 5.6 billion was raised via 42 deals. Issuance has subsequently failed to reach the $ 2 billion mark in every YTD period since 2007,” the report said.

PTI