The Charlotte, North Carolina-headquartered financial institution expects the deal avenue to be pushed by each consolidation within the sectors impacted by the pandemic and monetary establishments elevating development capital.
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Raj Balakrishnan, the pinnacle of India funding banking at BofA says, the pandemic is not like every other earlier crises, which have been enterprise crises.
“A company that was being run perfectly well till February may not be viable now for no fault of the management, as its business may be hit due to the lockdowns. Further, the same company may be perfectly fine once lockdown is over and normalcy returns as long as it has sufficient liquidity to sail through the crisis,” Balakrishnan informed PTI, expressing confidence within the broader enterprise restoration.
That is why, he stated, elevating capital is now the important thing to assist emerge as a winner.
Thanks to Reliance Industries promoting over 1 / 4 of its stake in its subsidiary Jio Platforms, the deal avenue was vibrant clocking practically $44 billion in H1 of 2020, up 14.5 per cent year-on-year.
Between late April and June, Reliance bought practically 25 per cent in Jio Platforms to 10 traders, together with Facebook, which snapped up 9.99 per cent for over Rs 43,000 crore. Then it bought 15 per cent extra, collectively elevating Rs 1.2 lakh crore together with by way of the biggest rights problem of Rs 53,124 crore in June.
Others who lapped up minority stake in Jio for $15.27 billion embody Silver Lake Partners, General Atlantic, KKR and others. The promoting spree continued in July with Google selecting up 7.7 per cent for over Rs 33,700 crore.
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According to trade tracker Mergermarket, BofA stood second within the i-banking league desk with offers value $6.7 billion within the first half, capturing 17.6 per cent market share. Morgan Stanley topped the checklist with $13 billion throughout 9 offers.
BofA was one of many bookrunners of the biggest rights problem by Reliance value Rs 53,124 crore in June. The financial institution additionally solely suggested Facebook for its stake-buy in Jio.
BofA additionally executed block offers for Standard Life Aberdeen (in HDFC Life and HDFC AMC) and for Blackstone in Embassy Office Parks REIT.
SBI Cards IPO, the biggest preliminary share itemizing in practically a decade, and Avenue Supermart’s (DMart) QIP and OFS are a number of the different large offers executed by BofA this 12 months.
And offers proceed to be labored on.
“We have a strong pipeline of deals and we are confident, the second half will be equally busy,” Balakrishnan stated.
Companies hit by the pandemic would attempt to promote down their non-core companies, and it will be one other alternative for funding bankers, he added.
Balakrishnan has a number of causes for being optimistic on the offers entrance.
“Plenty of minority stake sale is going on throughout India Inc and we are going to see some gross sales pushed by portfolio selection as nicely. You can even see fairly some exercise within the e-commerce area the place consolidation is probably going,” he added.
In June alone, BofA dealt with six market transactions elevating over $8.5 billion for shoppers. The offers included Standard Life Aberdeen promoting 5.6 per cent in HDFC AMC for $378 million by way of OFS, the RIL rights problem of $7.1 bullion, and Blackstone promoting stake in Embassy Office Parks REIT for $500 million amongst others.
“We were the busiest i-banker on the street amid a challenging and volatile market backdrop. From the landmark $7.1 billion RIL rights issuance, which is the largest ever capital market transaction in the country to $18 million Andhra Paper OFS — we were there adding the most relevant investor colour and helping our clients access liquidity,” he stated.
According to Mergermarket, Morgan Stanley and BofA have picked practically half of the $43.5-billion offers in H1, by way of simply 11 of the 72 offers.
But when it comes to quantity, the interval noticed 24.7 per cent fewer offers at 183 as in opposition to 243 Y-o-Y.
Morgan Stanley led the league desk finishing 9 offers value $13.53 billion.