Introduction

In the financial markets, especially in securities underwriting, multiple managers often work together to handle the issuance of securities. When more than one manager is involved in the underwriting, management, and distribution of securities, they are referred to as Joint Managers.

Joint Managers play a crucial role in Initial Public Offerings (IPOs), Follow-on Public Offerings (FPOs), bond issuances, and other capital-raising activities. Their involvement ensures that the issuance process is efficient, well-distributed among investors, and compliant with SEBI (Securities and Exchange Board of India) regulations.

This article explores the meaning, role, functions, and significance of Joint Managers in the Indian financial market.

What Is a Joint Manager?

A Joint Manager refers to a financial institution, investment bank, or brokerage firm that collaborates with other managers in the underwriting and distribution of securities. The term "joint" indicates that two or more managers share the responsibilities of pricing, marketing, and selling the securities.

In India, Joint Managers are commonly seen in large public offerings, corporate bond issues, and government securities underwriting where a single entity may not be able to handle the entire issuance.

Example: If a company like Tata Motors launches an IPO worth ₹5,000 crore, multiple investment banks such as Kotak Mahindra Capital, ICICI Securities, and SBI Capital Markets may act as Joint Managers to ensure broad investor participation and efficient capital raising.

Key Features of Joint Managers

• Multiple managers involved in underwriting and securities distribution.
• Common in IPOs, FPOs, rights issues, and bond issuances.
• Ensures risk-sharing and better market coverage.
• Regulated by SEBI to ensure fair allocation and compliance.
• Enhances investor confidence and market stability.

Role of Joint Managers in the Indian Financial Market

1. Underwriting Securities

• Joint Managers commit capital to ensure that an IPO or bond issuance is successful.
• If investor demand is low, they may purchase unsold securities, reducing risk for the issuing company.

2. Structuring the Offering

• They help determine the price range, issue size, and investor categories.
• Assist in drafting the prospectus and ensuring SEBI compliance.

3. Marketing & Investor Outreach

• Joint Managers conduct roadshows, presentations, and investor meetings to generate demand.
• They target retail, institutional, and foreign investors to ensure full subscription.

4. Allocating Shares or Bonds

• They distribute securities among different investors based on demand and market conditions.
• Ensures a fair allocation process to institutional and retail investors.

5. Risk Management & Compliance

• Monitor market conditions to adjust pricing and allocation strategies.
• Ensure compliance with SEBI and RBI regulations in the securities issuance process.

When Are Joint Managers Required?

• Large IPOs & FPOs: When the issue size is too large for a single manager to handle.
• Bond Issuances: Corporate and government bonds often have multiple managers.
• High-Risk Offerings: To reduce risk, companies appoint multiple managers to underwrite the issuance.
• International Offerings: When Indian firms issue global depositary receipts (GDRs), foreign bonds, or overseas listings, multiple managers coordinate the issuance.

Example: In LIC’s IPO (₹21,000 crore in 2022), multiple investment banks acted as Joint Managers, including Goldman Sachs, SBI Capital, and Kotak Mahindra Capital.

Benefits of Having Joint Managers

1. Risk Diversification

• The financial burden of underwriting is shared among multiple managers.
• No single institution bears the entire risk of the issuance.

2. Greater Market Reach

• More managers mean better access to domestic and international investors.
• Helps attract Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs).

3. Better Execution & Price Stability

• Joint Managers work together to prevent excessive volatility in share prices after listing.
• Ensures that the public issue is fully subscribed without excessive discounting.

4. Regulatory Compliance

• Ensures that all activities adhere to SEBI guidelines and legal frameworks.
• Prevents manipulative practices and ensures fair pricing.

Example: In an IPO worth ₹10,000 crore, SBI Capital Markets might be the Lead Manager, while ICICI Securities and Axis Capital act as Joint Managers to ensure better market reach.

Challenges of Joint Managers in India

1. Coordination & Decision-Making Issues

With multiple managers involved, there may be conflicts in pricing strategy or allocation.

2. Higher Costs

Companies need to pay fees to multiple managers, increasing underwriting expenses.

3. Overlapping Responsibilities

If roles are not clearly defined, mismanagement of investor outreach and allocation can occur.

4. Market Volatility Risks

If demand is miscalculated, Joint Managers may struggle to stabilize stock prices post-listing.

Regulations Governing Joint Managers in India

• Securities and Exchange Board of India (SEBI): Regulates IPOs, FPOs, and bond issuances to ensure fair practices.
• Companies Act, 2013: Governs the issuance of corporate securities in India.
• Reserve Bank of India (RBI): Regulates bond issuances, especially for government securities.

All Joint Managers must follow SEBI’s guidelines, including:

• Due diligence on the issuing company.
• Transparent pricing mechanisms to prevent price manipulation.
• Ensuring full investor disclosures to maintain market integrity.

Recent Examples of Joint Managers in India

• Life Insurance Corporation (LIC) IPO (₹21,000 crore, 2022) – Managed by Kotak Mahindra Capital, SBI Capital, Goldman Sachs, and Citigroup.
• Zomato IPO (₹9,375 crore, 2021) – Joint Managers included Morgan Stanley, Kotak, and Credit Suisse.
• Reliance Jio Bond Issue (₹5,000 crore, 2023) – Managed by Axis Bank, ICICI Securities, and HSBC India.

Conclusion

Joint Managers play a critical role in securities underwriting and capital market transactions in India. By working together, multiple managers help ensure efficient execution, risk sharing, and regulatory compliance in public offerings and bond issuances. Their presence is particularly important in large IPOs, government bond issuances, and high-value corporate fundraisings, where market stability and investor confidence are key.

As India’s capital markets grow, the role of Joint Managers in structuring, pricing, and marketing securities will become even more important. Investors and companies should carefully evaluate the expertise and market reach of Joint Managers to maximize the success of any capital-raising activity.