We are at the beginning of a healthy IPO cycle in India: BofA MD Roy
MUMBAI : Corporate India has often been praised by investors for maintaining a stronger cash position and for being debt-free, Subhrajit Roy, managing director and head of global capital markets, Bank of America, said in an interview. He anticipates an acceleration in capital markets activity in 2024, in view of the deleveraging of corporate balance sheets and restarting of the capex cycle. Edited excerpts: 2023 has been interesting and the activity has been in phases.
The first four months were pretty quiet. Come May, and we see a broader risk appetite where block deals led the way. To be fair blocks have been resilient throughout the last couple of years, irrespective of the market condition.
Every quarter it averaged $2.5-3 billion. This year was unprecedented. We saw deals of maybe $5 billion being executed in April-June.
This is, of course, because demand side has picked up and supply was reasonably stable. It was never zero, unlike let’s say, initial public offerings( IPOs) and follow-on public offers which saw these periods of no activity in recent times. Yes, IPOs have been absorbed well as domestic demand has been strong.
But they’re also now being balanced well by FII demand. Notwithstanding the overall FII trajectory, where we have seen the activity to be choppy. It is a very balanced demand scenario.
And typically, the outcomes are also, win-win for both buyers and sellers, which is how trades can be done. Generally, corporate India sponsors have also been very thoughtful on the aftermarket. So, its an important part of decision making on how the stock trades in the aftermarket and how to price it for the IPO.
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