Global dealmakers throng India
One more global powerhouse from the financial sector seems to have succumbed to the attraction that the Indian economy is offering. Goldman Sachs, after having spent a total of 14 years in a joint venture (JV) with the Kotak Group, has finally decided to go it alone and enter the high growth arena of investment banking, asset management and brokerage services on its own.
Before Goldman Sachs made public its India plans, leading global giants like CLSA, Credit Suisse, Macquarie Bank, Rothschild and Lehman Brothers had already set shop in India or had joined hands with major domestic players in the investment banking arena. Interestingly, outside Japan, India has become Asia’s third-biggest market for investment banks, behind China and South Korea, with fees last year more than doubling to $381 million.
Recently, Australia’s leading financial services firm, Macquarie, made its entry in the Indian market to offer investment banking services. Moreover, the bank’s property, financial services and treasury & commodities group are also exploring opportunities in India. “Our expansion plans into India allow us to service global investors looking for opportunities in India and offer clients our unparalleled access to regional and global market,” said Hon Warwick Smith, executive director Macquarie Bank, at the time of the launch.
Similarly, Rothschild has tied up with ABN Amro and recently handled their first public issue and that of Mahindra & Mahindra Financial Services Ltd. Frank Hancock, managing director, ABN Amro Asia Corporate Finance (I) Pvt Ltd, said, “Mahindra & Mahindra was our first issue as an investment bank and we are very excited to be in India. The Indian economy is booming and almost all the global brands are looking at India.” Incidentally, ABN Amro Rothschild will also be handling the issue of Deccan Aviation.
Not long ago, leading international investment banker, CLSA joined hands with SBI Capital Markets Ltd to work on large deals in equity markets and mergers & acquisition (M&A) advisory. Interestingly, one has also witnessed the foreign partner buying out the domestic partner’s stake in the recent past. Merrill Lynch bought an additional 47.8% stake from Hemendra Kothari in DSP Merrill Lynch for a whopping Rs 2,360 crore.
“With the Indian markets booming, everyone wants to have the complete cake and not share it with someone. Everyone wants to play in the Indian markets”, said Rashesh Shah, managing director, Edelweiss Capital Ltd.