Star bankers moving to newer roles, beefing up their teams by poaching from rivals

by / Friday, 14 November 2014 / Published in News & Updates

MUMBAI: As India’s economic prospects brighten, the investment banking community senses a revival in mergers and acquisitions activity. That’s unleashed a round of musical chairs which is set to get more frenetic once the budget, seen as being heavily reformoriented, is unveiled on July 10.

Apart from a likely surge in deals, the government also plans to offload stakes in state-owned companies to raise much-needed resources. Clearly, the season for job-hopping has begun for rain makers who sell, buy, merge or raise money for companies as growing business confidence sparks hiring by investment banks, pension funds and many big corporates. Some bulge-bracket Wall Street investment banks are facing top-level churn in a sign that star bankers are moving to newer roles, while many are beefing up their teams by poaching senior talent from rivals. Ashish Adukia and Anshuman Thakur, two executive directors at Morgan Stanley, have quit.

Both, with more than a decade’s experience, were among a few senior bankers who executed several deals for the American bank, which sold its wealth management business to rival Standard Chartered Bank Plc last year and abandoned plans to open a bank in India. A spokesperson for Morgan Stanley declined to comment. Both are expected to join India’s largest business houses.

They couldn’t be reached for comment. Many foreign and local investment banks, pension funds and business houses are beefing up their investment banking teams as they look to acquire both global and local assets in the expectation that the new government will push reforms to revive growth. Bank of America Merrill Lynch and Goldman Sachs have started hunting for senior bankers from rivals through search firms. Global boutique bank Moelis, headed by ace banker Manisha Girotra, has poached Apurva Mazumder, a senior banker, from rival JP Morgan.

Mazumder, with more than a decade’s experience, will join as executive director. Meanwhile, the industry grapevine has it that a multinational investment bank is taking over the investment banking team of a family-owned institutional brokerage. Australian bank Macquarie Capital, buoyed by prospects of acquisitions in the infrastructure sector, plans to step up hiring. “It’s a good time to expand our team as deal prospects are looking bright,” said Gaurav Gupta, managing director, Macquarie Capital India, which specialises in advising road, power and airport developers. Mergers and acquisitions (M&A) volume rose in April after a two-year lull to $6.9 billion and 49 deals, including the purchase of Ranbaxy Laboratories by Sun Pharma, as against $1.8 billion and 42 deals a year ago, a Grant Thornton Deal Tracker report released on May 19 showed.

“The overall M&A market witnessed an upsurge this month with two deals valued at over a billion dollars each, six deals over $100 million and five deals between $50-100 million,” the report said. “The overall deal sentiment is definitely looking up and with the new government formation we expect the overall deal activity to rebound positively in the coming months,” said Grant Thornton India LLP Partner Raja Lahiri.
Infrastructure, energy, consumer and financial services are expected to witness renewed activity, he added. Deal volume for the first four months between January and April rose to $13.7 billion with 362 deals compared with $10 billion in the year-earlier period with 312 deals. Some local investment banks are hiring to start new initiatives and strengthen teams. Avendus is looking to hire between six and 10 bankers this year as part of its plans. “We will look at hiring talent with anywhere between two and five years experience,” said Gaurav Deepak, Avendus co-promoter and managing director.

Drug maker Cipla hired two specialized investment bankers from private equity funds to strengthen its M&A team and recently purchased a controlling stake in smaller rival companies in Sri Lanka and Africa. Some pension funds that have been aggressive on India have started hiring as well. Canadian Pension Fund, which has announced a real estate development joint venture with the Sharpoonji Pallonji Group and a real estate financing alliance with billionaire Ajay Piramal, poached V Hari Krishna, co-founder and director at Kotak Realty Fund, which manages $1 billion.

India’s family-owned and boutique investment banks are also beefing up staff as they expect a wave of both bond and public offers. Last fortnight, brokerage Motilal Oswal snared Mukund Ranganathan from rival Edelweiss Capital as executive director, investment banking, while Girish Nadkarni joined from rival Avendus as its investment banking head. The firm has hired seven bankers this calendar year. “We are quite optimistic about business growth. We are bringing people with diverse experience as deal flows will improve in the near future,” said Motilal Oswal, chairman of the eponymous firm.