If you wanted to put a banker’s faith in the mantra of ‘long-term greedy’ to the test, the Indian IPO scene would not be a bad place to start. There has been the promise of gold at the end of the rainbow in India for many years, but the riches have remained as elusive as the leprechaun’s pot.
Fee suppression is a constant grumble that has tested the patience of many veteran dealmakers, often prompting the question of whether or not it is worth doing business there. For some the answer is no, but for others India is not a market they are prepared to abandon.
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| Indian bankers say the IPO pipeline is growing after the election of Narendra Modi as prime minister |
The election of Narendra Modi as prime minster in May has translated into generally bullish sentiment on India; investors are hopeful of some movement on much-needed reforms. Along with the optimism about Modi, ECM bankers are hoping for a healthier pipeline of listings to accompany the new political mood.
Even if a new wave of listings does come, will banks finally reap the rewards of persistence in a market where good compensation is notoriously hard to come by?
“Look at any market around the world, I can’t think of a single example where fees go down and then come up,” says one senior banker based in Hong Kong.