India: Waiting game continues for foreign investment banks

Sid Verma
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Even in a bullish scenario where a Rajan-Modi dream team unleashes reforms – from PSL to the bond market – in an economic super-cycle that sees public lenders recapitalized, foreign investment banks could still be chasing rainbows in India. It is an over-banked market, with dozens of fee-hungry institutions jockeying for business.

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...