Khaitan & Co has filed more IPO drafts than any other firm in 2017 just ahead of Cyril Amarchand Mangaldas, in a market where downward pricing pressures have made it tough across the board.
According to our analysis of nearly 60 draft red-herring prospectuses (DRHPs) uploaded to the Securities and Exchange Board of India (SEBI) website in the 2017 calendar year, Khaitan had roles for either the issuer or the banks on 18, followed by Cyril Amarchand Mangaldas (CAM) with 17 core IPO mandates.
Out of those two, CAM had a strong slant towards acting for company issuers (in 14 out of 17 of their instructions), whereas Khaitan’s work was split nearly half between work for issuers (10) and for the banks and managers (8).
Unsurprisingly, both of these firms are also the ones with the biggest teams: Khaitan & Co has 7 equity capital markets partners, with a total lawyer headcount of 31 in equity capital markets. Cyril Amarchand on the other hand, has 8 partners, but a total lawyer headcount of 54.
Correction: Khaitan’s brochure lists 12 partners in its capital markets practice, however we have been told that this figure also includes secondary capital, debt capital markets and securities litigation. Update: CAM has clarified that its total supplied headcount figure includes only equity capital markets (ECM) lawyers.
Luthra & Luthra, meanwhile, has a slightly leaner team at only 5 partners (and around 25 total lawyers), but has punched far above its weight into third place with 14 IPOs, with an exact even split in its work between issuers and banks.
Shardul Amarchand Mangaldas too has an equally lean team of 5 partners (and around 25 total lawyers), but has pulled in 10 IPO mandates (6 of which were for issuers).
AZB & Partners and S&R Associates are neck-and-neck in the tally at 8 and 7 IPOs respectively (but while AZB had a slight preference for bank mandates (at 5 out of 8), S&R was unusual compared to the others in having acted only for banks and lead managers in all 7 of its IPOs).
AZB has a team of 4 partners (and a total team of around 24 lawyers) in Delhi and Mumbai, and S&R too has 4 core capital markets partners (though associates do not specialise only in a single practice area).
We have reached out to capital markets partners at all these firms for comment.
Trilegal and Kanga & Co had more modest capital markets presences, with three mandates each, while Crawford Bayley tied with J Sagar Associates (JSA) with two mandates.
How times have changed
Mumbai-based old-school solicitors firm Crawford Bayley used to have a massive capital markets practice, at least in volumes and associate headcounts, headed by a single equity
In our last published capital markets league of the 2010-11 financial year, Crawford Bayley had a whopping 14 IPO mandates (ranking it fourth behind Amarchand Mangaldas, Luthra & Luthra and AZB & Partners). With two mandates in 2017, this now seems to have fallen off a cliff.
Khaitan was in distant fifth position back then, with only 11 IPOs (compared to combined Amarchand’s 39).
The reversal of fortunes between Khaitan and Amarchand can be attributed to Khaitan’s massive investment in the area (as evidenced by its massive partner headcounts), which began with the 2013 hire of former Morgan Stanley managing director and non-lawyer Sudhir Bassi, to head its practice as director.
Luthra, meanwhile, has managed to hold on to its position post the Amarchand split and the ascent of Khaitan, and is now in third place under the stewardship of Manan Lahoty in Mumbai, following the departure of ex-Luthra-capital markets head Madhurima Mukherjee to AZB in 2014.
Topsies and turvies
Amidst all the movings and shakings, the market has not been an easy one, with a number of firms having reported heavy pricing pressure from other firms, making it hard to maintain margins.
The biggest ones to blame in all this are the public sector undertakings (PSU).
“Basically all private deals are profitable - degrees vary,” comments one partner bluntly, then adds: “And none of government and PSU deals are.”
Still, while PSU deals may not pay a lot, they do work in keeping large teams busy and can build expertise and credibility in the market. It will be no surprise that the top-two-ranked firms in the tables handled the majority of PSU IPOs.
Khaitan worked on Cochin Shipyard, Hindustan Aeronautics, SBI Life Insurance and GIC.
Cyril Amarchand was involved in all of Khaitan’s PSU mandates, and also handled the one of Indian Renewable Energy Development Agency (alongside J Sagar Associates (JSA)).
Luthra scored the Housing and Urban Development Corporation (HUDCO) mandate (alongside Trilegal), as well as work in The New India Assurance Company IPO (in which AZB was also involved).
SAM has not done any PSU IPOs in 2017 (in stark contrast to the days when SAM and CAM were still one firm, and the majority of non-PSU mandates at Amarchand Mangaldas were based in CAM’s Mumbai home, while Delhi often scored the PSU mandates in the capital).
“We remain focussed on maintaining good profitability in a challenging practice area, pricing wise,” comments SAM Delhi-based capital markets practice head Prashant Gupta, which did not act on any IPOs. “We maintain amongst the smaller sized teams in the market and stayed away from PSU mandates, but I think transaction activity and pipeline in general is quite good.”
AZB’s Mukherjee echoes that sentiment. “We only want to do deals at a sensible price, or our costs don’t work out,” she explains. “Unfortunately, pricing continues to be the pain factor in capital markets.
“Law firms continue to undercut, even on deals where clients are raising billions and the pricing just doesn’t justify the hours spent on the deal. This lack of perspective may make this difficult practice unviable in the long run.”
Shareholder mandates
In recent years it has become a trend for law firms to also get mentioned in prospectuses for selling shareholder mandates, though some firms such as Shardul Amarchand Mangaldas and S&R Associates do not include their name for that work even when they handle it.
For the purpose of the total mandates metrics and ranking, we have therefore excluded selling shareholder mandates, which are usually a fraction of the work (and fees) of an IPO mandate for an issuer or the banks (four firms that only did one seller shareholder mandate each, are listed at the bottom of the table).
These mandates could be for private equity funds or promoters, which law firms in any case will want to keep sweet, and fees can range from as little as several thousand Rupees to more than Rs 20,000.
It’s not necessarily cookie cutter work though: it could require partner-led negotiations on agreements with underwriters, rather than just a simple proofread.
If those mandates were included, then CAM would be top of the roost by far, with eight mentions as acting for seller shareholders (compared to Khaitan’s 2 recorded such mandates).
This story was first published exclusively for and shared with Legally India subscribers last week. If you’d like updates as soon as they happen, please subscribe below.
2017 capital markets IPO league table (click headings to sort)
| Firm | Total IPOs(excl. SH) | For Issuers | For Banks | For SHs | IPO mandates(excl. seller shareholders (SH)) |
|---|---|---|---|---|---|
| Khaitan & Co | 18 | 10 | 8 | 2 | Gtpl Hathway LimitedEris Lifesciences Limited Bharat Road Network Limited Cochin Shipyard Limited Shalby Limited Dixon Technologies (India) Limited Newgen Software Technologies Limited Amber Enterprises India Limited Hindustan Aeronautics Limited Cms Info Systems Limited Khadim India Limited Sbi Life Insurance Company Limited Future Supply Chain Solutions Limited Mahindra Logistics Limited General Insurance Corporation Of India Reliance General Insurance Company Limited Srei Equipment Finance Limited Sandhar Technologies Limited |
| Cyril Amarchand Mangaldas | 17 | 14 | 3 | 8 | Tejas Networks LimitedCochin Shipyard Limited Indian Energy Exchange Limited Prataap Snacks Limited Amber Enterprises India Limited Hindustan Aeronautics Limited Khadim India Limited Godrej Agrovet Limited Sbi Life Insurance Company Limited Future Supply Chain Solutions Limited Barbeque-Nation Hospitality Limited Aster Dm Healthcare Limited General Insurance Corporation Of India Icici Lombard General Insurance Company Limited Krishna Institute Of Medical Sciences Limited Icici Securities Limited Indian Renewable Energy Development Agency Limited |
| Luthra & Luthra Law Offices | 14 | 7 | 7 | 2 | Housing And Urban Development Corporation LimitedMas Financial Services Limited Matrimony.Com Limited Lemon Tree Hotels Limited Acme Solar Holdings Limited Cms Info Systems Limited Seven Islands Shipping Limited Gandhar Oil Refinery (India) Limited Godrej Agrovet Limited Reliance Nippon Life Asset Management Limited The New India Assurance Company Limited Reliance General Insurance Company Limited Prince Pipes And Fittings Limited Krishna Institute Of Medical Sciences Limited |
| Shardul Amarchand Mangaldas & Co | 10 | 6 | 4 | 0 | Gtpl Hathway LimitedAu Financiers (India) Limited Eris Lifesciences Limited Nakshatra World Limited Indian Energy Exchange Limited H.G. Infra Engineering Limited Newgen Software Technologies Limited Lemon Tree Hotels Limited Acme Solar Holdings Limited Srei Equipment Finance Limited |
| AZB & Partners | 8 | 3 | 5 | 5 | Au Financiers (India) LimitedCapacit’E Infraprojects Limited Prataap Snacks Limited Hdfc Standard Life Insurance Company Limited Galaxy Surfactants Limited The New India Assurance Company Limited Mahindra Logistics Limited Prince Pipes And Fittings Limited |
| S&R Associates | 7 | 0 | 7 | 0 | Matrimony.Com LimitedReliance Nippon Life Asset Management Limited Hdfc Standard Life Insurance Company Limited Barbeque-Nation Hospitality Limited Aster Dm Healthcare Limited Icici Lombard General Insurance Company Limited Icici Securities Limited |
| Trilegal | 3 | 1 | 2 | 2 | Housing And Urban Development Corporation LimitedTejas Networks Limited Seven Islands Shipping Limited |
| Kanga & Co | 3 | 3 | 0 | 0 | Karda Consturctions LimitedAstron Paper & Board Mill Limited Vishwaraj Sugar Industries Limited |
| Crawford Bayley & Co | 2 | 2 | 0 | 1 | Capacit’E Infraprojects LimitedApollo Micro Systems Limited |
| J Sagar Associates | 2 | 1 | 1 | 2 | Galaxy Surfactants LimitedIndian Renewable Energy Development Agency Limited |
| Laurus Legal | 1 | 1 | 0 | 0 | Salasar Techno Engineering Limited |
| Bharucha & Partners | 1 | 0 | 1 | 0 | Bharat Road Network Limited |
| Narendra Tahilramani Advocate | 1 | 1 | 0 | 0 | Four Seasons Residency Limited |
| ALMT Legal | 1 | 1 | 0 | 1 | Apex Frozen Foods Limited |
| BMR Legal | 1 | 0 | 1 | 0 | Shalby Limited |
| Bathiya Legal | 1 | 1 | 0 | 0 | Gandhar Oil Refinery (India) Limited |
| Dhir & Dhir Associates | 0 | 0 | 0 | 1 | |
| Nishith Desai Associates | 0 | 0 | 0 | 1 | |
| Desai & Diwanji Advocates and Solicitors | 0 | 0 | 0 | 1 | |
| Platinum Partners | 0 | 0 | 0 | 1 |
Source: Legally India research, via IPO DHPs first published on SEBI’s website in 2017
Photo by rungtaadi
Comments
Any idea about salary bracket in the top five listed above for the following PPL
Partner
Associate Partner
Counsel(As top one has that designation as well)
Principal Associate
Senior Associate
and last not the least Associate.
Thanks much.
If you land mandates by lying and then delivering shoddy work, may god only save you.
Before everyone jumps up in support for Khaitan, ask any capital markets lawyer if incorrect pagination in an offer document is acceptable. That is the work product they deliver.
Brochure clearly identifies which partner does capital markets.
If an entire vertical spends one year doing two invits of which only one sees the light of day, such losses are bound to happen.
Then again, if CAM didn’t run after invits, how would km have been promoted.
Kian - it’s publicy available information - please add.
Oh man! Yash won't be feeling too good.
Had changed the paragraph re Luthra's team size to say "slightly" leaner, since Khaitan had issued a correction regarding its nearly as lean team-size :)
Big clients - Not really (?)
Deal no. - Definitely No
Bhatta, awesome stuff.
Hope Cyril is feeling fine after losing the top spot.
Every capital markets lawyer worth their salt in India knows that the downward pressure in the mandates is due to khaitan and their peanut mandates.
An iPo for 45 lacs for a non PSU company is ridiculous. Let’s see if khaitan can now find the wisdom to come up to the big leagues and start charging sustainable rates and whether they will continue this after charging market rates.
Unless they don’t believe that the big boy rates will be justifiable for their shoddy work product.
CAM doesn't know the meaning of undercutting, because for them, it is called 'strategy':
https://www.legallyindia.com/home/cyril-amarchand-undercuts-sam-luthra-by-5-12x-to-win-complex-air-india-sale-mandate-for-only-rs-29-9-lakh-20171030-8851
CAM has been undercutting (quoting even below hourly salary costs!) last few years, just to keep lawyers busy. Anyone in the market for 3-4 years has seen and knows this. So lets please stop pretending.
Name one client from CAM's IPO list which has been a client of theirs for more than 2 years (not even the I-bank names, despite incorporating it in '66!)? got all mandates only bcoz they quoted lowest for them
My Bubba, this is a real merchant banker talking...
Printing final EL on letterhead copy doesn't tell you the behind the scenes action, now does it? ;)
"" I believe ""!! Amusing how 'factual' that makes your argument betajaan.
Another reason for low bonuses this year. :(
Big deal size doesn't mean more fees. We're talking about lawyers'fee here - not bankers'.
In any case, it violated our guidelines, sorry :)
He treats everyone in the team with respect and is not the short tempered and arrogant beast like some of the other corporate partners. He lets people run their show, stepping in only when required without the insecurities that haunt most others there.
Sigh! If only there were more like him in Luthra, they would have had it much better.
Rishabh and team have done a great job in creating and nurturing the practice, will be bigger than Cam's ECM practice in under a few years. Already employs 10-12fee earners, and growing at a healthy clip.
With Rishabh, the place is in safe hands. No succession worries at this firm
1. It's difficult and time-consuming for us to link values to DHRPs.
2. Since we're just looking at DHRPs, values may not be available necessarily since some have not listed.
3. To some extent, even smaller IPOs are a lot of work and can require expertise, so size doesn't always matter (though I admit it does, sometimes).
4. If we include values, then PSU mandates would begin to dwarf others and skew the table (even though the fees on PSU work are very low, so it doesn't necessarily give any indication of the profitability of a practice).
In short, this is not intended to be a completely comprehensive CM analysis, but it's intended to give a good indication of strength and busyness of practices.
We hope to do QIPs and other CM stuff soon though.
Did that firm also pay us 8 or so years ago, when we did our first IPO league tables for several years in a row with basically identical methodology?
We went with publicly available information and a computer algorithm analysed it, the outcome was out of our hands (and the accuracy does not seem to be disputed).
In the interest of full disclosure, the only potential 'discretion' we exercised here, was excluding seller shareholder mandates from the total tally, but I think that's a reasonable call considering the different work involved, the fact that some firms don't even list them, plus that it's a pretty recent phenomenon even mentioning them in the first place.
The other decision we made was excluding deal values, but that's mostly a practical consideration, though it doesn't mean we can't consider these in future.
I haven't actually seen the Bloomberg CM tables in a while - are they available for free or do they require subscriptions?
The idea with rolling our own CM table (and hopefully others), will be to introduce a new data-driven level of transparency into these, where anyone can reproduce and interpret the data.
2. The issue/offer size will only be available in a red herring/prospectus.
3. Value matters because firms that are more selective about their mandates will prefer to work on high value offerings that typically have more international marketing - i.e. issuers that are raising more money and can pay foreign bankers fees tend to care about quality and will pay law firms better.
4. The current league table doesn't give any indication of profitability either - only which firms value their work on par with law firms and which firms value their work on par with the printers. The real story that you need to break is pricing.
If not, the time you have spent with your eloquent contribution will make that deliverable of yours late again and a bonus which will be truly then rats ass. If you are Cyril's partner you are screwed either way and six ways on Sundays, so do please carry on with the comments!
Does anyone have a view on the partners that this practice has built as opposed to the partners building the practice.
These guys are the ones who usually work the least and bill the highest. They have a loyal entourage constantly at their beck and call. The iPad is their preferred weapon. If they happen to be on an update call the bankers better sit up and listen. Their word is final and if you happen to make them happy (with your work off course), rest assured you take home a Hibiki or a Dom Perignon! They holiday round the year... in all exotic locations (off course) and yet manage to keep a close watch on their competition. When in town they don't miss a chance to sleep with their biggest enemy - the bankers (P.S. - this is not SH okay...just a metaphor)). they are the cool guys. i want to be a cool guy. i want to be a PARTNER and not just a partner.
SAM - monal and nikhil (partners); PRASHANT GUPTA (PARTNER);
CAM - gaurav gupte; YASH ASHAR;
AZB - madhurima and agnik; VAROON CHANDRA;
KCO - bassi, subhayu and thomas; ABHIMANYU BHATTA;
S&R - juhi chawla and jabarti chandra; SANDIP BHAGAT;
L&L - mohit saraf; MANAN LAHOTY;
A lot of SME listings are happening.
You can find all law firms advising SME Companies.
Which firm are you referring to here. As far as the information in the public domain goes, CAM and Khaitan were on some of the big deals here. If CAM and Khaitan both are “third rate” firms, I wonder what you consider top grade.
Either you are ignorant or just acting up, either way most of the readers don’t care unless you come up with some intelligent arguments.
Come up with something better if you need attention.
SAM is in safe hands of Mr. Gupta, who has been successful in calling the shots from the capital, and been able to keep the practice the most profitable (evident in the salaries and bonuses the team takes home).
AZB is the firm to keep a close eye at. It rises like the phoenix from the ashes. Mr. Chandra has done it in the past and is in the process of creating the most formidable team yet again. Probably the only partner with a good number of equity and debt deals under his hat.
S&R have been top of their game and as a firm policy never do company mandates. Mr. Bhagat is living legend of capital markets.
Never worked with Luthra so no comments.
This year should be interesting to see if players on the bench (Trilegal, JSA, NDA) are able to come out and perform on the field.
When i joined this practice i was told it is cyclical and there will be days you will be going home at 5. It's been more than a year now, and yes i have always left at 5...right in time for the sunrise and not the sunset as promised. Achche din kab aayenge?
Hope there is a lull period of six months in the new financial year (after declaration of bonuses)
[img]https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcTCj1cVgyoB9zim4mM2-BK2028qZqT1QRbJLfMnatg1Ss_bTTngKrpfCiTj2Q[/img]
They sure know how to party...so what if its Goa every year...no boring seminars, free flowing booze and ability to indulge in other wonderful things which cannot be mentioned in this forum make it the best 4 days of their lives.
I am the PARTNER
The comments here justify the saying:
“Respect can be bought. Envy has to be earned.”