Mumbai: Founded 200 years ago in London, Rothschild Bank International Ltd is one of the largest privately owned investment bank in the world. Today, Rothschild offers advisory services to governments and corporations in equity and debt transactions from across 30 countries. It has a global joint venture with the Dutch bank ABN Amro NV in equity capital market (ECM) business.
In India, Rothschild started operations in 1999. It ranked No. 1 in the mergers and acquisitions advisory business in India, both in 2005 and 2006, in Thomson Financial’s industry league tables.
It has helped the restructuring and sale of the Dabhol Power Co., GVK Group’s consortium bid for Mumbai airport privatization, Dr. Reddy’s Laboratories Ltd’s $576 million acquisition of Germany’s Betapharm, Cairn India Ltd’s $2 billion public float as well as Tata Steel Ltd’s Corus acquisition.
In an interview with Mint, Sanjay Bhandarkar, head of Rothschild in India, explains its business and the deal climate in India. Edited excerpts:
You have been very focused on M&A advisory in India, compared with private equity or debt advisory business. Will you increase the focus on other areas?
It is true that we have been focused on M&A deals in the past. Being a European bank, there is a natural advantage for us as cross-border M&A between India and Europe continues to be strong. However, we will increase private equity and debt advisory. We have grown from a team of seven to 16. This now gives us the human bandwidth to do more business.
Purely advisory: Sanjay Bhandarkar, head of Rothschild in India.
We do have private equity advisory. We had advised Air Deccan’s fund raising and that of Radio Mirchi immediately after inception. At present, we are in the process of closing Angel Broking’s private equity placement. Debt advisory is relatively new in India. We will be doing that a great deal going ahead. We have the experience. Dabhol’s case is a good example. In terms of debt rising, we have worked with Hindustan Construction Ltd and few others.
Unlike other large investment banks in India, you do not directly offer M&A funding for companies. Why is it?
Yes, our business model has been purely advisory. We do not provide M&A financing. The company has followed this policy for centuries and we have established ourselves well in the advisory business. In India, we are relatively new. It has been just seven years. Our ECM operations (through ABN Amro Rothschild) are bound to increase in India along with all other services that we offer internationally. It’s a vast market and we are a small team. We are picking business very carefully. There are so many opportunities out here.
You had topped the M&A league tables in past two years. Where will you stand in 2007?