David de Rothschild, chairman of UK-based investment bank NM Rothschild & Sons Ltd, came to India on the wings of the Tata Steel-Corus deal after seven years of building business in the subcontinent to declare that its market has warmed .to taking advice.
Removing his glasses from the edge of his nose, Rothschild told a press audience at a South Mumbai hotel about the strengths of his firm, “when you combine seasoned M&A advisors with sector experts, and you approach the plan with a long-term view, you can produce results.”
The 200-year-old private company came to India seven years back and in 2006 has led deals including Dr Reddy’s Lab acquisition of Germany’s Betapharm and advised GVK Group on its Mumbai airport bid. NM Rothschild was brought in to advise Tata Steel—in addition to ABN Amro and Deutsche Bank—late in the game after the Brazilian company CSN upped the stakes and the complexity.
Rothschild said he had come to India on vacation four years ago, and will spend these next four days hopefully initiating deals and meeting key politicians.
NM Rothschild is banking on a change in the Indian environment, expecting companies will be open to outside advice and want an independent opinion—as Tata Steel did—outside of funding services. “We don’t mind disagreeing,” he said.
“We are not there to be liked by the clients, we are there to service them.”
He said clients would respond to the fact that his firm’s viability depends on advisory services, and that should prove that it offers value-added services. And given that there are no shareholders to oblige, the service would be much more likely to remain clandestine.
The firm has expanded its services offerings through its ABN Amro-Rothschild partnership, offering equity capital markets service, and it has over the years added private wealth management and merchant banking.
Rothschild said private wealth management services may be added to the India operations in the future.
“We started in India in investment banking but I see no reason why we couldn’t expand the front end of business in markets such as this and in some places of Asia,” he said.
“Are there immediate plans? No. Is it something we will think about? Certainly yes.”
The firm aims to serve India on domestic as well as cross border deals, and the firm does not expect all revenues to come from mega deals. Rothschild, who took his post from his cousin in 2003, said he couldn’t give figures on his expected returns in India.
But he estimated that revenues from markets outside Europe, the UK and Russia were around 20%, and would blossom into 35% in five years and 45% in 10 years.