Why India may be the most investible emerging market in the world

The Asset announces the winners of The Asset Triple A Country Awards 2017, South Asia

INDIA may be one of the most investible emerging markets in the world, seeing increased digitalization of its banking system, tax reforms, and increased activity in its capital markets, including an uptick in IPO activity.

India ECM volume reached US$18.2 billion via 182 deals in the first nine months of 2017, more than double the US$7.7 billion in the same period in 2016, according to data from Dealogic. IPO activity is expected to exceed the target of US$5 billion in proceeds this year, according to a report from accounting firm EY.

Further, another report, by Morgan Stanley, shows India’s economy is set to leapfrog from its current seventh-place position to the third-largest economy by 2027 with US$6 trillion gross domestic product; its equity market, now tenth in the world, could jump to fifth, buoyed by financial services and consumer discretionary stocks.

“It (India) ticks a lot of global fund managers’ boxes in terms of what they are looking for”, says one senior ECM banker based in Hong Kong, “a good growth profile, strong government and a sophisticated market, particularly in the financial space where a lot of the supply has come from.”

With the rise of India in the region, The Asset announces the winners of The Asset Triple A Country Awards 2017, South Asia. The Triple A Country Awards’ evaluation process involves weeks of intense pitching with the participating institutions to further scrutinize their submission materials. It also included engagement with the issuers and borrowers, which helps the board of editors validate the deserving winners.

This year, the awards attracted more submissions than in any other year, boosted by the increasing participation from domestic financial institutions. It was also a manifestation of the increasing role of regional and Chinese banks as they continue to challenge the global banks in arranging capital markets transactions in Asia.

Winners
Citi was a big winner in India, grabbing the accolades for the Best bank (Global), Best corporate and institutional bank (Global) and Best M&A adviser. It is the only foreign bank in India with a full service onshore platform in the country – from investment banking, advisory and transaction services, capital markets to retail banking and cards. It was among the top arrangers of equity and debt capital markets transactions, and was involved in a number of M&A deals that defined the Indian market this year.

Kotak Mahindra Bank was voted as the Best bank (Domestic). It posted a 22% increase in profit after tax in the second quarter of fiscal year 2018 (April-March). Net interest income was up 16%, while net interest margin was at 4.33%.

Axis Capital emerged as the Best corporate and institutional bank (Domestic) and Best equity adviser as it captured good slices of the equity, structured finance and M&A transactions during the year. In the ECM space, it concluded 19 deals during the review period, including 12 IPOs such as the 84 billion rupee (US$1.28 billion) IPO for SBI Life Insurance and the 18.7 billion rupee IPO for Avenue Supermarts, which was selected as the Best IPO for India.

Standard Chartered was chosen as the Best bond adviser (Global) for arranging most of the marquee deals out of India, such as the US$1 billion offering for Vedanta Resources in January this year that included a liability management with an any-and-all tender offer for the company’s 2018 and 2019 bonds. It also helped arranged the inaugural euro bond transaction for NTPC amounting to 500 million euros (US$581.40 million) and the first ever international debt offering by National Highways Authority of India, of 30-billion-rupee Masala bonds.

Axis Capital’s parent Axis Bank emerged as the Best bond adviser (Domestic) for arranging innovative transactions, bringing new credit into the market and leading deals on a sole basis. Incidentally, the bank also boasts of international debt capital markets’ credentials, arranging transactions in US dollar, euro and rupees (Masala bonds) for Indian issuers.

Credit Suisse wins the Best loan adviser award for executing a number of landmark bilateral and syndicated financing, including the US$394.3 million deal for Mu Sigma and a US$651 million term loan facility for Cairn India. Kotak Securities retains the Best brokerage honour as it consistently ranks high among investors for its broking services in India.

Over in Pakistan, Credit Suisse is the Best corporate and institutional bank (Global) having completed a number of significant structured finance deals, while working on ECM and M&A mandates. Allied Bank retains the Best corporate and institutional bank (Domestic) and the Best loan adviser awards for underwriting rights issues and registering a strong performance in the syndication loan market.

It was a banner year for Arif Habib, having snared two awards – Best equity adviser and Best brokerage. It executed 14 ECM transactions valued at 186 billion Pakistani rupee (US$1.76 billion) during the review period and was the lead consultant in the 4.488-billion-rupee IPO for the Pakistan Stock Exchange, which was selected as the Best equity deal for Pakistan. Its brokerage franchise stood out in 2017 with a strong client base among institutional, corporate, high net worth and retail investors.

In terms of best deals, the 6-billion-taka (US$71.88 million) fixed-rate loan for KSRM Billet Industries was selected as the Best syndicated loan for Bangladesh, while in Sri Lanka, the Best deal accolades went to the sovereign’s US$1.5 billion bonds and to SriLankan Airlines’ US$125 million structured syndicated financing.

For the full list of winners, please click here, and for the best deals, click here.