129. Investment bankers back in business

Investment bankers are back in business after a brief lull as companies have started pushing for initial public offers (IPOs) to capitalise on the improved market sentiment. While top international investment banks including Citi, Deutsche Bank, JPMorgan and Merrill Lynch have either been mandated for big IPOs or are in talks in that regard, local names such as Enam, JM Financial, Kotak, SSKI and SBI Capital are not far behind. Investment bankers have reportedly set their eyes on HDFC Standard Life Insurance (HDFC Life), a subsidiary of Housing Development and Finance Corporation.

HDFC Life, in which the parent has a 76 per cent stake, could be the first domestic insurance company to be listed. It is valued at a whopping Rs 15,000 crore to Rs 20,000 crore ($3 billion-5 billion) and aims to raise Rs 1,500 crore to Rs 2,000 crore by diluting 10 per cent. While JP Morgan has been pushing hard for the mandate, sources in the know reckon that the HDFC Life deal was likely to go JM Financial's way, given HDFC's proximity to the chairman Nimesh Kampani.

Valuation challenges and right pricing would be the major concerns for bankers after the recent market crash, according to market analysts. Investment bankers were out of work for a couple of months as the primary market was in a terrible shape. The investor sentiment reached its nadir after the withdrawal of public issues by Emaar MGF and Wockhardt.

Banks had started feeling pinch as deals in foreign currency bonds also dried up following the global credit crunch. A top international bank had asked its staff to limit the expenses on business lunches and other leisure activities. "The situation does not seem to be so bad now as corporate houses worldwide are showing an interest in raising funds through primary markets and merger and acquisition activity is also picking up," said an analyst.