India's buoyant equity capital markets have sparked a great demand for bankers, in sharp contrast to other parts of Asia where seasoned dealmakers are facing job cuts.
The primary market boom in Asia's third-largest economy comes as an upbeat economic growth outlook and confidence that prime minister Narendra Modi will secure a third five-year term in the current election support investor sentiment. Several large IPOs are in the pipeline, including Hyundai Motor India, online retailer FirstCry India, and food delivery provider Swiggy, as issuers take advantage of high equity valuations.
According to LSEG data, India's first-quarter ECM volume rose 175% year on year to a record US$14.6bn. The country accounted for 43% of the total volume in Asia Pacific, excluding Japan.
JP Morgan, Goldman Sachs, Axis Capital, ICICI Securities and JM Financial are among the banks that are currently looking to hire senior ECM bankers, said market sources. The banks declined to comment.
Hiring struggles
A senior ECM banker at a global bank said it was not easy to find the right fit given the shortage of investment bankers in India.
“The only word to describe activity in India right now is 'exuberant', and there are not a lot of investment bankers in the job market in Mumbai at the moment,” he said.
The mismatch between supply and demand means banks are scrambling to hire or hold on to the right people.
The most dramatic move has been at Citigroup, where Arvind Vashistha, the head of India ECM, last week reversed his earlier decision to leave the firm, according to an internal memo.
"We are pleased to announce that Arvind Vashistha will continue in his role as head of India equity capital markets at Citi, reporting to Udhay Furtado and Ken Chow in Hong Kong," said the memo on April 15.
Furtado is head of Asia north/Australia and Asia south ECM origination and solutions, while Chow is head of Asia north/Australia and Asia south ECM products and execution.
"Arvind’s ongoing leadership will continue to be crucial to driving our franchise forward," according to the memo.
In early February, Vashistha had decided to join JP Morgan after 10 years at Citi – a decision that prompted Abhinav Bharti, JP Morgan's head of ECM for India, to leave the firm.
The subsequent exit from JP Morgan of investment bankers who had played a role in bringing Vashistha there may have contributed to his reversal, people with knowledge of the development said.
In March, Citigroup poached Viswas Raghavan from JP Morgan as head of banking. Raghavan was global head of investment banking at JP Morgan, based in London. JP Morgan's Asia ECM business is overseen from London.
Meanwhile, JP Morgan's head of global equity capital markets, Achintya Mangla, is leaving the bank and rumoured to be heading to Citi too. A spokesperson for Citi declined to comment.
Bharti's next move is not known although some bankers do not rule out the possibility of JP Morgan rehiring him. "Abhinav has some options at hand but Arvind's decision has changed the whole pitch and anything is possible now," another senior ECM banker away from JP Morgan said.
As activity in India's IPO and block markets gathers momentum, issuers, vendors and investors want to work with the senior-most banker in any bank. "If a managing director level banker is not present at a meeting, the pitch is not taken seriously," the banker said.
Axis Capital, which has suffered an exodus since last year, including its CEO, co-heads of ECM and senior coverage bankers, earlier this month poached Pratik Loonker from ICICI Securities.
Loonker will be heading the ECM business and will have an additional role, the details of which are not currently available. He will report to CEO Atul Mehra.
Mumbai-based Loonker joined ICICI Securities as head of ECM just last year.
Axis Capital and ICICI Securities are the investment banking arms of Axis Bank and ICICI Bank.
"It is not the best time to be a hiring manager in India ECM now," a local banker said. "No one knows whether the person we have hired will join, let alone stay with a bank for a decent period of time."
With ECM bankers in high demand, “it is really like a game of musical chairs,” another ECM banker with a global bank said.
"India is not a one-quarter investment for banks. It is long term," said a Mumbai-based banking analyst.
Cuts elsewhere
The scramble for Indian dealmakers comes even as the rest of Asia weathers a slump in capital markets activity amid a sharp drop in China-related deals. The slowdown and subsequent slump in investment banking fees has prompted several banks to cut jobs in Hong Kong and mainland China.
Just this week, HSBC let go of about a dozen investment bankers, mostly in Hong Kong. Meanwhile, Morgan Stanley is said to be cutting about 50 investment banking jobs in the region. Citigroup also trimmed its workforce in Asia as part of a months-long global restructuring. And market watchers expect more layoffs in the region, especially in Greater China.
First-quarter investment banking fees from ECM deals in Asia dropped 58% year on year, according to LSEG data, but ECM fees in India more than doubled.
"India did not do a lot of firing even when fees were low, and fees are expected to go up," the Mumbai-based analyst said.