India's new money game

The Indian capital markets have been on a tear this year, and nowhere is that more apparent than in the torrent of qualified institutional placements (QIPs) we've seen - particularly in the real estate sector.

This past quarter was a standout, with four QIP deals in real estate totaling a whopping $940 million. That's nearly six times the value we saw just last quarter, largely driven by a massive $602 million raise from Prestige Estates, which Cyril Amarchand Mangaldas (CAM) acted on. CAM also advised on a $179 million QIP for Brigade Enterprises.

"This strong QIP activity highlights the sectors crucial role in India's broader capital markets - and the institutional investors growing confidence in Indian real estate." - Anuj Puri, chairman of ANAROCK Group

Qualified Institutional Placements, or QIP, allow publicly traded companies to raise capital by offering equities or securities convertible into equity to pre-approved institutional buyers. This fundraising approach lets companies skip the more conventional Initial Public Offering (IPO) route and quickly raise substantial funds.

What's behind this QIP surge? For one, the overall post-pandemic recovery in the residential market has been remarkably robust. Couple that with increased transparency across the sector, and you've got real estate firms feeling bullish about their growth prospects. And in a market currently hovering near record highs, they're able to raise serious capital without diluting their existing shareholders too severely.

Many real estate firms are looking at raising money through public listings in the near future, given the positive sentiment in India's stock market, said Manan Lahoty, head of the capital markets practice at CAM.

Real estate developers are also raising funds via IPOs to fund new project launches across geographies. Since 2021, six developers have collectively raised over $600 million through mainstream IPOs. The developers who raised funds via IPOs since 2021 till date are Macrotech Developers Ltd, Shriram Properties, Keystone, Signature Global, Suraj Estate and Arkade Developers.

So, what are they doing with all the QIP money now?

Well, they're diving into high-demand segments, like senior living projects. Non-metro cities are seeing a massive uptick in interest, with demand expected to triple over the next 4-5 years. Take Prestige Estates, for instance. They've raised a massive ?5,000 crores through a QIP, and they're also going full throttle with senior living developments to cash in on the booming market.

What trends or patterns have you observed in QIP activities in India and beyond? Write to me at [email protected] and include your full name and location. We might feature your response in a future edition.

Further reading

• Read more from the latest issue of the ALB India edition

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Can Tokyo Metro's $2.3bln IPO revive Japan's public finance market?

Tokyo Metro's landmark $2.3 billion IPO, the largest in Japan in six years, is poised to drive momentum in the country's equity capital markets.

This significant transaction was advised by Nagashima Ohno & Tsunematsu and Simpson Thacher & Bartlett on the Tokyo Metro side, while Anderson Mori & Tomotsune and Davis Polk & Wardwell represented the international managers.

The offering was over 15 times oversubscribed, signaling immense investor appetite. The listing comes at a critical time, as China's IPO market loses steam amid regulatory uncertainty. Analysts believe Tokyo Metro's debut could catalyze a resurgence in Japanese public offerings, with the government and regulators keen to ensure its success.

The IPO's outsized size and visibility are expected to attract further investor attention to Japan, which has seen subdued IPO activity in recent years. This could open the door for more companies to pursue listings, capitalizing on the renewed enthusiasm.

Moreover, the Tokyo Metro deal underscores Japan's position as an attractive destination for global investors seeking exposure to infrastructure and transportation sectors. Its success may also prompt increased efforts by exchanges like NASDAQ to attract more Japanese IPOs, further developing the country's capital markets.

Alongside India's $3.3 billion Hyundai IPO, these landmark transactions are set to become bellwethers for their respective markets, potentially ushering in a new era of robust IPO activity in Asia.

Nishimura claims HK spot as Skadden ditches Shanghai

Japanese Big Four firm Nishimura & Asahi has continued its aggressive international expansion with the opening of an office in Hong Kong by year end. The office will make it the first major Japanese law firm to directly open an outpost in the Asian financial centre.?

The Nishimura Hong Kong office will be led by asset finance partner Ryuichi Sakamoto, who will relocate from Tokyo later this year. He will be joined by former Nishimura partner Saori Okada, who is currently the name partner of Okada Law Firm.

Nishimura’s entry into Hong Kong is part of the firm’s strategic Asian expansion moving from a regional firm to a pan-Asian one, increasingly challenging the traditional dominance of global players in key financial centres.?

“Our firm has been providing a wide range of legal services to Japanese companies seeking to establish a presence and engage in business activities in Hong Kong. Nishimura & Asahi also represents Hong Kong companies and other overseas companies with a presence in the area that engage or wish to engage in business in Japan,” Nishimura said in a statement. ?

“The matters we have been involved with range from the establishment of subsidiaries, mergers and acquisitions, and providing support for clients engaging in various types of trade in Hong Kong,” the firm added.?

The Japanese giant has been following its clients abroad in recent times, announcing new offices in London and Brussels by early 2025.?

Fellow Japanese firm Anderson Mori & Tomotsune has had an association in Hong Kong – through Nakamura & Partners – since 2020.?

Meanwhile, U.S. M&A powerhouse Skadden, Arps, Slate, Meagher & Flom will be closing its Shanghai office and adjusting its corporate business in China, joining a string of America-based law firms lowering their stakes in the world's wobbly second largest economy.

Skadden's Shanghai office currently has 19 legal professionals, including two partners: Haiping Li, the office head, and Yuting Wu. Li works across both the Shanghai and Hong Kong offices.

Skadden still has offices in Beijing and Hong Kong. The Beijing office, established in 1991, currently has 13 legal professionals, including two partners, Kai Sun and Yilin Xu. The Hong Kong office has 76 employees and is led by lawyer Steve Kwok. Other Asia outposts of the firm include Seoul, Tokyo, and Singapore.

“We continually examine the scope and scale of our practices and operations around the world to ensure that they are aligned with our clients’ needs and our strategic plans. Shifting market dynamics have led us to the decision to begin winding down our operations in Shanghai and rescale our China corporate practice,” the firm states.

Globally, Skadden fetched the second spot on value of M&A deals advised at $274.1 billion through the first three quarters of 2024, trailing only private equity heavyweight Kirkland & Ellis, according to Bloomberg Law data.

Coming up

Awards

• Nov 6: ALB Korea Law Awards (Conrad, Seoul)
• Nov 14: ALB Philippine Law Awards (Manila)

Summit

• Nov 21: ALB Legal Technology Conference (Bengalore, India)

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