Goldman Sachs stood out in the crowded market for Indian equity underwriting in 2015, securing lucrative sole mandates and leading every major government divestment.
In the busiest year for equity offerings in a decade, Goldman completed both the biggest block trade and the largest government sell-down, showing that underwriters need not always work for losses.
Goldman’s most impressive deal during IFR’s review period was a Rs200bn (US$3.2bn) block in Sun Pharmaceutical Industries from Daiichi Sankyo in April.
At US$3.2bn, the deal exceeded the US$2.5bn–$3bn daily trading volume across the entire Indian stock market. To put together a trade of this scale without any news leaks ahead of it, and crossing all 215m shares on the stock exchanges without investors losing their orders was no small task. To top it all, Goldman was the sole bank on the deal, building on its advisory relationship with the Japanese company during the sale of its Ranbaxy unit to Sun Pharma in 2014.
Daiichi sold 215m shares, or a 8.9% stake, in Sun Pharma at Rs931.60 each, beating the previous record for India’s biggest overnight block trade, Citigroup’s Rs96bn sale of HDFC shares in 2012.
The biggest challenge for Goldman’s Sun block was to find investors not already holding the highly liquid stock.
Goldman’s global network came into play. Of the roughly 130 accounts in the transaction, Goldman brought in foreign institutional investors for close to US$2.6bn of shares, the highest daily investment of this group of investors in India.
A double-digit discount, a rarity in Indian ECM, generated strong response from investors. The shares were priced from the Rs930.0–Rs1,043.8 range and the final level represented a 10.7% discount to the pre-deal spot of Rs1,043.80.
The mega block sent Goldman straight to the top of the league table, but it was far from the bank’s only success during the year. During the review period, Goldman sealed seven deals to raise a total of US$4.4bn, more than double the tally of its nearest rival.
Goldman also worked on the country’s largest equity transaction – the sale of the government’s 10% stake in Coal India for Rs226bn in January. One of Goldman’s key contributions was to explain to management how to handle queries from investors and volunteer groups on its sustainable development policy.
Goldman was also a bookrunner on the Rs43bn QIP of IndusInd and the US$1.6bn ADR-cum-local share placement of HDFC.
Other significant blocks Goldman managed were the US$161m promoter-led sell-down in Crompton Greaves and a international investor’s sale of US$260m of shares in Axis Bank.
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