ROTHSCHILD plans to beef up its equity capital markets (ECM) advisory business in India and also provide debt advisory services amid the country’s dealmaking boom.
The expansion plans at Rothschild follow a surge of initial public offerings (IPOs) in the Indian stock market, partly driven by some multinational companies seeking to unlock value from their local operations, according to Aalok Shah, a managing director and co-head of Rothschild India.
“We have an equity advisory product where we work with companies to prepare them for an IPO, including selection of banks, assigning valuations and pricing, and then fees for these banks,” Shah said. “I think it’s going to be like a core focus area as long as the whole IPO market is also active and growing.”
Dealmaking activity in India has gained momentum this year as its economy continues to rank among the fastest-growing in the world.
Around US$6.4 billion has been raised through IPOs in the South Asian nation this year, almost double the amount from the same period a year earlier, data compiled by Bloomberg show. That’s also roughly three times the amount raised in Hong Kong, the data show.
And there’s more to come. Among those, Hyundai Motor could raise as much as US$3.5 billion from a share sale of its Indian unit, Bloomberg News has reported. Hillhouse Investment is considering options for the Indian unit of Versuni Group BV, formerly Philips Domestic Appliances, sources familiar with the matter have said.
To help with that work, Rothschild pools in existing resources from London, Dubai and Singapore, Shah said. It also plans to double its existing team in India, he added.
The firm is also starting a debt advisory business as an increasing number of Indian companies consider raising debt to help boost growth. It may seek to hire some bankers to help businesses on refinancing, syndication and acquisition financing, among other services, Shah said.
Beyond equity and debt, Rothschild sees opportunities in mergers and acquisitions (M&A) advisory as both local and global companies seek deals in India, particularly in sectors such as infrastructure, renewable energy, health care and technology, according to Shah. A big part of that M&A activity will be driven by large private equity funds, he added.
KKR is buying medical device maker Healthium Medtech in a transaction valued at as much as US$1 billion. KKR is also acquiring a controlling stake in Baby Memorial Hospital in the southern state of Kerala, while Warburg Pincus has invested in eye-care equipment and devices maker Appasamy.
As part of its expansion plans in India, Rothschild has moved to a new office which is more than double the size of its earlier space.
“From a Rothschild perspective, India is core to the future growth of our business globally,” Shah said. BLOOMBERG
