As India’s equity markets stir, Nandini Lakshman investigates some of the recent deals, reveals the law firms that guided them and asks what’s in store for cash-hungry companies

It has been a modest but eventful couple of years for India’s capital markets, with a rebound on the back of the election of a new government empowered by an absolute majority in May 2014. Although the figures haven’t reached the exuberant buoyancy of capital market deals in previous years, there has been notable activity in different pockets as fund-starved companies grappled with swelling balance sheet deficits and few opportunities for raising fresh capital.

Corporate India has been weighed down by heavy loans and defaults on foreign currency convertible bonds. According to The Wall Street Journal, Indian infrastructure companies alone owe foreign lenders US$48 billion, the highest figure in more than a decade, while the Business Standard pegged India Inc’s total foreign debt pile at US$161 billion in September 2014.

However, over the past two years, a host of factors have stimulated Indian companies’ hunger for capital and demand for public issues. In the year to 31 March 2015 the number of initial public offerings (IPOs) rose to 47 from 41 a year earlier, according to deal tracker Prime Database. But while demand remained high, the total value of IPOs shrank to around ₹30.6 billion (US$462 million) compared to ₹89.8 billion earlier.

“Bringing an unlisted company to market in India has been fairly arduous, in general,” says Monal Mukherjee, a partner at Shardul Amarchand Mangaldas & Co (SAM). “Disclosure standards for IPOs as well as continuing disclosure norms for listed companies can be onerous. However, we have seen immense liberalization and reform in this space.”

Madhurima Mukherjee, a partner at AZB & Partners, adds: “The government in the last two years has tried to take a lot of steps towards ensuring the ease of doing business in India, which goes a long way in encouraging positive sentiment and confidence among investors.”

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