In 2013, investment-banking revenue, for DCM, M&A and ECM, was a mere $397 million. ECM posted a paltry $58 million, compared with a total $758 million for 2010, though that was still relatively modest given India’s $2.1 trillion GDP. In fact, India represented just 6.9% of the non-Japan emerging Asia fee pool in 2013, compared with 55% for China and 7.2% for tiny Singapore.
Though there has been a spirited rebound in deal-flow since the elections – investment banks posted $252 million of revenue year-to-end-August – bankers are under no illusions about the state of the intensely competitive landscape, even as the likes of Barclays, RBS and Morgan Stanley have retrenched in recent years.
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Citi, which posted 6.6% market share, second to Axis Bank with 7%, last year, is one of the few houses to have maintained a relatively stable franchise. Ravi Kapoor, head of corporate and investment banking, Citi India, says: “There are about 40 foreign and domestic investment banks competing for business, so it is an over-banked market, where the volumes, deal-sizes and margins are modest compared to other regions.