Axis Bank may step up offshore investment banking as it aims to market bonds globally
MUMBAI: Axis Bank, the country’s third-biggest private sector lender, plans to step up offshore investment banking as it aims to market bonds globally amid rising corporate India’s interest in overseas markets.
The bank, which has been topping the league table on bond sales, may also tie up with some international players on the distribution side, a senior executive has told ET. “Nothing has matured yet but we have to go step by step,” the executive said on condition of anonymity. “We are talking to people across the board. Initially, we are emphasising on investor relationships (globally).”
“We are taking stock of overseas markets…. how much investment do we need and so on,” he said. The bank may be in the process of appointing a consultant to secure an overview of different overseas debt capital markets.
Last year, Axis BankBSE 1.93 % topped the Bloomberg investment bank league table for the debt capital market for the seventh year in a row, a milestone hardly seen in corporate bond sales. The bank ranked first with deals amounting to Rs 53,200 crore, which constituted about 18.3% of the market share, followed by ICICI with 9.5% and Trust Investment Advisors with 7.3% market share.
During the year, India bond issuances increased 13% to Rs 2.90 lakh crore compared with around Rs 2.58 lakh crore in 2013. The largest deal was the Rs 8,000-crore bond issuance by Food Corporation of India.
The consistent performance has now prompted Axis Bank to look at overseas debt capital market business, which is dominated by foreign investment bankers such as Barclays, HSBC, Citi and Standard Chartered. “We have our offices in Singapore, Dubai, London and Dubai
We will take advantage of our business in these financial centres. We have started establishing relationships with FIIs over there,” the Axis Bank executive said. Fund raising by Indian companies through overseas bond sales is expected to increase this year.
Cross-border debt issuances by Indian companies could nearly double to test the $25-billion mark over the next few years from $14 billion in 2014, according to Standard & Poor’s, an international rating company. A stable exchange rate is also cushioning issuers, who normally hedge their borrowing exposures.
Axis Bank would be focusing on Indian corporate bond issuers, who may now be willing to raise funds offshore for their overseas businesses. Those issuers may find it cheaper to tap overseas debt capital market than the domestic debt market.
