Perfect harmony
In a year when investors turned to India as a non-correlated alternative to China, one bank stood out in a highly competitive field. For its breadth of coverage and depth of expertise, Axis Bank is IFR Asia’s Asian Bank of the Year.
If 2021 was the year when India finally punched its weight in Asian investment banking, Axis Bank emerged as the pound-for-pound champion.
A mixture of low interest rates, a burgeoning pipeline of new economy companies, more domestic savings being channelled into the capital markets and regulatory uncertainty in other markets led to a flurry of dealmaking in the country.
As equity and debt issuance boomed, India’s third-largest private sector bank led standout trades across all major products and segments. This included the record Rs183bn (US$2.47bn) Paytm IPO, on which it was the only local house to act as global coordinator.
But Axis Bank was more than just the passive beneficiary of wider industry trends. It spotted opportunities ahead of many of its competitors and was quick to act on them.
Even as a second wave of Covid-19 weighed on the market in April, Axis Bank found ample demand for Macrotech Developers’ Rs25bn IPO as one of the global coordinators.
Its DCM team led the way in the shift towards floating-rate notes as interest rate expectations changed, and reopened the country’s dormant green bond market after a three-year lull through Vector Green Energy’s Rs12.37bn three-year offering.
What stands out above all else though is the breadth of deals Axis Bank worked on in the past 12 months. It did not shy away from some of the trickier trades and was willing to take a chance on industry champions in difficult sectors such as Nuvoco Vistas, whose Rs50bn IPO was the first cement sector listing in India in 14 years.
Axis Bank’s performance in DCM was encapsulated by its market share in India, which at 17.1% was double that of its nearest challenger.
In the league tables it ranked first for DCM in India, according to Refinitiv data, and came in third for ECM, up two places from the previous year despite strong competition from foreign houses.
In a year when investment banking activity in India was firing on all cylinders, Axis Bank’s edge in terms of headcount and sector coverage counted in its favour.
“One advantage we have is we don’t have the bandwidth constraint some of our competitors have, meaning we’re able to take on a lot more transactions and deliver successfully,” said Vivek Toshniwal, executive director and co-head of ECM at Axis Capital, the investment banking arm of Axis Bank.
“We have about 80 investment bankers, which is probably the largest in the industry. We are certainly the most senior team in the country as most of the team has been in place for many years and we have a very strong bench.”
One team
The DCM team, which sits within Axis Bank, is headed by Vikas Shinde, who has been at the bank for 15 years. The ECM team sits within Axis Capital and is co-headed by Toshniwal and Ashish Kumbhat, who together have worked at the bank for more than two-and-a-half decades.
Beyond their depth of experience, what stands out among Axis Bank’s top bankers is their pedigree in the industry.
Axis Capital’s corporate finance team is headed up by Anay Khare, who also serves as chairman of the Association of Investment Bankers of India. The team effectively deals with a lot of the regulatory requirements from Sebi and the various stock exchanges, not an insignificant task in a country such as India where regulations seem to change by the week.
Khare’s extensive knowledge of Sebi’s listing requirements was said to be one reason why Axis Capital was the only Indian bank to secure a joint global coordinator role for digital payments company Paytm, as it brought the largest IPO in India’s history.
The ‘One Axis’ philosophy permeates everything the bank does. It might be easy to dismiss this as management speak, but India’s banks have notoriously sprawling organisational structures and making sure all the different parts are working together is no mean feat.
“We are a large bank with many business teams and verticals. However, when we provide a solution to our clients, we are ‘One Axis’. This signifies that the client has a single touch-point through a corporate relationship manager for an entire suite of products that Axis Bank provides,” said Shinde. “That makes us stand out from our competition.”
The Rs12.83bn India Grid Trust rights issue was a case in point. This was the first rights issue by an infrastructure trust in India and as sole banker on the deal Axis Capital advised management through the entire process, including dealing with the numerous requests from regulators regarding the procedure and allotment.
All-round excellence
Axis Bank did not just excel in niche pockets though. Last year was a record year for IPOs in India and Axis Capital turned up not just on the biggest trades but in areas where it could add value.
In the tech space, Axis Capital was lead left on the Rs29.99bn IPO of online vehicle marketplace CarTrade, while it was one of two lead managers handling EaseMyTrip’s Rs5.1bn IPO as it became the first travel booking website to list in India.
In the speciality chemicals sector, which also had a particularly strong year, it was lead left on the Rs8bn listing of India Pesticides, its eighth ECM offering in that industry since April 2020.
What was even more impressive was the role that it played for each issuer, consistently tapping its strong distribution network. On the CarTrade listing, for example, Axis Capital contributed the lion’s share of anchor orders, 36% of the book in a four-bank deal.
Axis Bank also helped open up new markets for different issuers and often made prescient calls about which structures to use.
For example, as interest rate expectations changed as the year wore on, Axis Bank successfully led the switch towards floating-rate bonds. It acted as sole arranger for HDFC on its Rs30bn three-year bond offering in September, one the first floaters to be issued last year and also the largest.
Axis Bank’s success in the offshore market last year was part of a multi-year effort. In 2016, it launched its offshore DCM team under the leadership of Viplove Chaturvedi and the bank is widely viewed as the leader in Masala bonds.
That leadership was demonstrated when, as sole arranger, it brought HDFC Bank’s Masala AT1 bond, a Rs7.39bn perpetual non-call five offering.
As the first such instrument issued in Masala format, it added variety to the nascent market and also opened up a new funding avenue for banks. Raising bank capital notes onshore became difficult when regulators last year tightened rules for investing in the domestic market following Yes Bank’s Rs84.15bn AT1 writedown in 2020.
Similarly, Axis Bank has been placing a lot of emphasis in recent years on ESG and it worked on a number of landmark trades. The Vector Green Energy offering was the first AAA rated deal from the renewables sector, while the bank also helped bring solar power producer Renew Sun Waves’ Rs10.02bn bond offering to market.
Axis Bank itself broadened the ESG market when it sold India’s first sustainable AT1 issue, a US$600m perpetual non-call five issue priced at 4.1%, with the bank acting as joint global coordinator.
In a banner year for India, Axis Bank brought all of its strengths together to show leadership across the capital markets.
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