Domestic i-banks gain edge in IPOs

Initial public offerings (IPOs) without the backing of a foreign investment bank have fared better than those with at least one foreign bank. Since January 2010, a total of 62 IPOs, with an issue size of about Rs 300 crore, have hit the market. Of which, 37 (60 per cent) are trading above the issue price, data compiled from Bloomberg and Prime Database show. From the total 62 IPOs, 29 have been handled entirely by domestic investment bankers, of which 19 are trading above the issue price.

Around 33 IPOs had a mix of domestic and foreign bankers, of which, 55 per cent are trading above issue price. The trend shows domestic banks have increasingly become comfortable handling IPOs without help from foreign peers. Typically, foreign banks are instrumental in getting investors from abroad.

In 2016, six foreign investment banks have been part of 15 offerings. In contrast, 14 domestic banks have been part of all 15. Local banks have, thus, dominated the list in 2015 and 2016 so far. Last year, Kotak Mahindra Bank topped the charts, with nine issues, followed by Axis Bank and Citi.

In 2007, there were three foreign banks and two domestic banks handling a large issue; now, the situation is the reverse.