Although volatile economic conditions quietened activity in India’s equity-capital markets this year, Citigroup still dominated with lead roles in a variety of offerings.
There were fewer deals, but Citigroup guided promoter-led stake sales for both private and state-owned companies, IPOs and qualified institutional placements. These succeeded because the bank’s global marketing team was able to attract a wide range of investors, particularly large ones, even amid shaky market conditions.
Only a few IPOs larger than US$100m were seen in India since November 2012 and Citigroup was the left-lead manager on the most successful one – Just Dial’s Rs9.3bn (US$147m) listing.
The Internet firm’s 17.5m-share IPO was priced at Rs530, closer to the high end of talk ranging from Rs470 to Rs543. The IPO was 11.6x subscribed, with more than 80% of the demand at higher price levels.
Strikingly, the IPO was priced in June, even as the rupee was sinking to record lows on uncertainty over the future of the US Federal Reserve’s monetary stimulus. Just Dial’s shares have climbed more than 100% since the listing.
The IPO was India’s first to include a safety-net mechanism for retail investors, and it created a blueprint for others. The mechanism requires Just Dial to buy back shares if its stock trades below the IPO price six months after listing.
Among other equity financings, Citigroup was the joint underwriter in January for the largest qualified institutional placement since the introduction of QIP rules in 2006. The Rs47bn placement for Axis Bank was covered before the issue’s launch and was 3x subscribed.
The bank was also the joint bookrunner on a Rs10bn institutional placement programme for Adani Ports and a Rs2.7bn offer for sale for Blue Dart Express.
Another major area of activity for Citigroup was disinvestment offerings of India’s state-owned businesses. The Indian Government has been selling stakes in several firms to help lower its fiscal deficit.
The bank was the selling agent for the three largest deals. The government sold a 10% stake in mineral producer NMDC for $1.1bn in December and a 10% stake in Oil India for US$590m in January. Citigroup had previously worked on Oil India’s IPO in 2009. In early February, Citigroup was the selling agent of the government’s 9.5% stake in electricity utility NTPC, raising US$2.2bn.
Citigroup played a key role in securing foreign institutional demand for these stake sales. On the Oil India sale, Citigroup secured large anchor investors from India and Asia to drive the deal.
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