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Rise in coronavirus infections may affect fundraising activity


Fundraising activity for Indian companies has recovered after initially losing momentum because of the rapid spread of coronavirus infections, which has wreaked havoc in China and has also impacted South-East Asian countries, said two investment bankers.

Things could, however, worsen if the number of new infections rises sharply, particularly in Asian financial hubs such as Hong Kong and Singapore.

“Initially, the spread of the virus had caused some disruption to deals, but in the last few weeks, things have improved,” said the first investment banker, who worked on a dollar bond offering last week.

Several large deals, whether equity stake sales or dollar bond offerings, have been closed by Indian companies, in the last couple of weeks.

In February, Avenue Supermarts Ltd, which runs the supermarket chain DMart, raised around $1 billion selling its shares. Companies such as Bharti Airtel and IIFL Finance Ltd have collectively raised more than $500 million through their respective foreign debt offerings. Also, Adani Electricity Mumbai Ltd raised $1 billion through its debut dollar bond offering.

Physical roadshows in major Asian financial hubs have been affected, but as of now, most deals are being managed over calls with investors in these markets, the banker added. “If things don’t improve going ahead, then we could start seeing more impact on deals,” he said.

According to bankers, if the count of new coronavirus cases on a daily basis and the death count continues to grow in the coming days, then certain deals could start to see an impact, especially initial public offerings, which need a wider marketing effort.

The death toll from the coronavirus epidemic climbed to 1,665 after 142 more people died, mostly in the worst-hit Hubei province in China, and confirmed cases jumped to almost 70,000, officials said on Sunday.

“Lot of Hong Kong investors are saying that they’ll not be able to evaluate IPOs since they’re working from home and focusing on existing investments only,” the second investment banker said.

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