Investment bankers' fee income hits record $1.3 billion in 2023

Mumbai: Investment bankers laughed all the way to the bank as their fee income touched a new record of $1.3 billion in 2023, growing 28 per cent over the previous year.

At $1.3 billion in estimated fees during 2023, investment bankers collected 28 per cent more than they did last year, and this is the highest since records began in 2000, according to the data collated by LSEG Deals Intelligence, formerly Refinitiv.

The fee income of investment bankers got a boost due to higher equity and debt issuance volumes which offset the massive plunge in deal activities.

State Bank of India took the top position in investment banking fees chart with a collection of $102.7 million, which is 7.7 per cent of the country's overall investment banking fee pool, according to the agency.

The fee income chart was led by M&As (mergers and acquisitions) contributing $416.1 million, which was 7 per cent down year-on-year. The deal street saw a massive 51 per cent fall in value over 2022, the agency said.

The second highest fee source was the fee from equity capital market (ECM) underwritings, which reached $343.5 million, up 68 per cent over 2023, it said.

ECM activities raised $31.2 billion in 2023, up 59.6 per cent over 2022, making the latest collection figure the highest since 2021.

The number of ECM offerings also saw a 48.9 per cent jump on-year. The ECM mart was led by follow-on offerings, which accounted for 78 per cent of the overall ECM proceeds, raising $24.4 billion, up 105.1 per cent on-year, while volume grew 39.8 per cent.

IIFL Holdings led the ranking for ECM underwriting fees with USD 3.7 billion in total proceeds or 12 per cent of the total market, the agency said, but did not say how much IIFL collected in underwriting fee.

The year saw a record of sort with over 240 initial public offerings, and offers-for-sale, with the main board alone seeing 59 issues worth around Rs 54,000 crore, though it was down 17 per cent from the previous year in value terms.

On the other hand, debt capital market (DCM) underwriting fees totalled USD 247.3 million, up 23 per cent from a year ago.

Syndicated lending fees grew 70 per cent from the comparable period year and generated $325 million.

The year saw M&As plunging to a three-year low to $83.8 billion, down 50.6 per cent on-year, of which India-target M&As reached $76.4 billion, down 51.5 per cent from a year ago and the lowest annual period by value since 2020.

Domestic M&As totalled $51.8 billion, down 56.4 per cent.

Inbound M&As fell 36.4 per cent to $24.6 billion, the lowest since 2015, and outbound M&As declined 40.4 per cent to $5.9 billion, with the United States being the most targeted nation with 22.6 per cent market share.

Primary bond offerings raised $85.1 billion in 2023, a 25.5 per cent increase in proceeds, making it the highest since 2019.

Financial sector issuers captured 76.7 per cent market share and raised $65.3 billion, up 41.3 per cent.

ICICI Bank topped the ranking for bonds underwriting worth $12.9 billion, accounting for a 15.2 per cent market share, the agency said.