The largest bank’s in the world will earn more dealmaking fees in India than China this year. The financial world describes it as a change of focus as they sway away from China due to decoupling.
Various overseas banks have earned an enormous $231 million in mergers and acquisitions fees from Indian markets compared to $204 million earned in Chinese Markers during the same period as quoted by dealogic
JPMorgan is among one of such banks who have earned the most due mergers and acquisitions in India than in China this year as communicated by persons who are close to the bank. However, the entity have not commented on it
The revenue from china equity and bond markets which was one of the biggest source of earnings by the us & European markets in asia have fallen due to covid restrictions and increasing favors to local banks
“The evolution of banking wallet there with the growth in tech alongside the established corporate titans being more active had made India a leading investment banking market for citi in 2022. We expect that to continue in the years ahead with India” as quoted by Jan Metzger, head of banking, capital markets and advisory for Citi in Asia
India has positioned itself as a global spectrum for mergers & acquisition activity this year even in the scenario of inflation and recession fears which lead to the biggest decline in dealmaking in other regions of the globe. The mergers & acquisition activity in India surged 58 % year on year to an all-time high of $148 million in the first nine months of 2022. A massive chunk of that came from the $40bn merger between HDFC Bank, India’s third-biggest listed company by market capitalisation, and parent Housing Development Finance Corporation, the leading mortgage provider.
Bankers have also conveyed that a shift of mentality among Indian businesses to go for Initial public offering and equity issuance work have also risen. Previously when many of India’s largest listings were privatizations of state-owned assets, the fees were relatively low; however, this all changes when private companies come into the picture, and the work will be significantly more profitable.
India can be unpredictable and certainly, foreign businesses have been burnt there before. But you can no longer have all of your eggs in one basket now like in China, especially as supply chains & economics decouple as quoted by one of the asset managers growing in India who doesn’t want to be named.
As India continues to grow tremendously even in the inflation-burdened world trend. We could see hundreds of such deals happening in the future.
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