Investment Bankers Get $261.5 Million In Q1 Despite Fall In Deal Making Activities: Report

Despite a massive fall in deal making in the March quarter, deal makers laughed their way to the bank with $261.5 million in investment banking fees during the same period, according to a report.

The amount is 2 per cent higher compared to the year-ago period.

In the three months ended March, deal-making activities declined for the third consecutive quarter, making it the slowest start to a year since 2016 amid multiple headwinds.

Geopolitical tensions, supply chain disruptions, rising interest hikes and global recession fears continue to dampen boardroom confidence and investor sentiment, Refinitiv, which is an LSEG business unit and among the world's largest providers of financial markets data and infrastructure, said in the report.

Equity Capital Market (ECM) underwriting fees rose 15 per cent to $50 million -- the highest first quarter fees since 2021 while debt capital market underwriting fees totalled $71.4 million. The latter is a 22 per cent increase compared to the year-ago period.

Syndicated lending fees soared 86 per cent on-year generating $59.6 million in the first quarter of 2023.

However, completed M&A advisory fees fell 35 per cent on-year and totalled $80.5 million.

Wall Street investment banker Goldman Sachs took the top position for overall investment banking fees walking away with $20.2 million, accounting for 7.7 per cent of the wallet share in the investment banking fee pool, the report said.

Jefferies took the lead in ECM underwriting with $1.87 billion in related proceeds and 35.5 per cent market share. AK Capital Services topped the bond underwriting, with proceeds of $3.5 billion and accounted for 14.6 per cent market share.

The ECM market raised $5.3 billion in the first quarter, which is 42.4 per cent more than a year ago, making it the highest first quarter period by proceeds since the start of 2021. Number of ECM offerings grew 50.9 per cent.

Out of the total, IPO raised $142.8 million, down 86.7 per cent from a year ago, but the number of IPOs saw a 35.7 per cent increase year-on-year.

Follow-on offerings nearly doubled, raising $5.1 billion, driven by the share sale of four Adani group companies which totalled $1.9 billion.

M&As fell to a seven-year low to $10.8 billion, down 68.3 per cent as the number of announced deals dropped 3.3 per cent. Target India M&As reached $8.5 billion, down 70.4 per cent, making it the lowest first quarter by value since 2016.

Domestic M&As totalled $4.9 billion, down 67.3 per cent. Out of them, inbound M&As plunged 73.9 per cent to $3.6 billion and outbound M&As reached $2.1 billion, down 58.8 per cent with the US taking as much as 39.2 per cent market share.

Majority of the deal making activity involving India were in the industrials sector which totalled $2.3 billion, up 1.1 per cent and captured 21.5 per cent market share.

Financials totalled $1.9 billion, down 55.2 per cent with 17.8 per cent market share. Energy & power captured 11.8 per cent market share with $1.3 billion deals, which was up 123.6 per cent more than the year-ago period.

High technology sector, which saw the greatest number of deals in the March quarter accounted for 7.4 per cent market share with $801 million, down 90.9 per cent in value from a year ago.

Private equity-backed M&As amounted to $2.6 billion, down 76.6 per cent, making it the lowest first quarter period since 2020.