Kotak Investment Banking Anticipates Strong IPOs, Deal Activity In 2024
The leadership team at Kotak Investment Banking holds a positive outlook for India in 2024, expecting a surge in public listings, capital raises and mergers and acquisitions activity. Bloomberg data for 2023 revealed a decline of 57 per cent in total advisory activity for India compared to the substantial USD 185 billion in 2022. Globally, M&A trends hit a nearly 10-year low, dropping to USD 2.7 trillion, as per Bloomberg reports.
Several factors, including geopolitical tensions from ongoing conflicts, high interest rates globally and a sustained funding slowdown, contributed to a weakened investment climate for startups and companies seeking fresh capital. However, the anticipation of central banks reducing rates in 2024 has spurred a positive sentiment for investment.
According to S Ramesh, Kotak Investment Banking's Managing Director and CEO, corporates are exploring various capital-raising avenues given the conducive environment, with options spanning private capital, REITs, InVITs or even QIPs. Additionally, Pankaj Kalra, Managing Director of Institutional Coverage, noted a shift where financial sponsors are acting akin to investors and promoter families are considering relinquishing control for value creation based on financial prudence and business needs rather than emotional ties.
Kotak Investment Banking secured a dominant position in both primary and secondary markets in 2023, leading in volume terms according to Bloomberg data. In the M&A arena, they ranked fourth in value terms, behind Goldman Sachs, BofA and Morgan Stanley.
V Jayasankar, Managing Director at Kotak Investment Banking, predicts a doubling of IPO volumes in 2024, driven by larger IPOs and an expected increase in average deal size. This trend is anticipated to transcend traditional sectors, expanding into emerging areas like electric vehicles, fintech, and consumer technology, presenting a diverse range of investment opportunities. Companies like Ola Electric, First Cry, Byju's subsidiary Aakash and Mobikwik are among those planning public listings soon.
Abhimanyu Bhattacharya, a partner at Khaitan & Co, anticipates a mix of issuers in the market, including new-age technology companies and traditional sector representatives. The positive market sentiment for issuers with strong fundamentals observed in recent listings is expected to gain momentum and persist in 2024, driving the market's trajectory.
