Mumbai: JPMorgan, a leading global financial services firm, is expanding its operations inIndia to catch up with its global competitors who have entered the country only recently, but have been aggressively increasing their presence in India’s booming capital markets. Over the past two months, JPMorgan has expanded its Indian team by adding six individuals in its equity sales team, and three each in the equity research and investment banking teams.
Over the past year, global investment banks such as Lehman Brothers, Goldman Sachs, and Credit Suisse First Boston have set up shops in India and started competiting with the local investment banks.
JPMorgan, which has been in India for more than 60 years, had traditionally helped Indian firms raise money from overseas equity anddebt markets.
According to the annual Bloomberg league tables for 2006, JPMorgan was the third largest underwriter for depository receipts issued by Indian companies and the fifth largest underwriter for foreign currency convertible bond issues by Indian firms. Until recently, it didn’t have a significant presence in the domestic equity market, which involves helping companies raise money through initial public offerings (IPOs). Out of the 122 IPOs since 2006 (according to the website of the National Stock Exchange), the firm has been associated with only four: that of Akruti Nirman, ICICI Bank, Binani Cements and MindTree Consulting.
This explains the company’s new focus on expanding its equity and investment banking teams.
“We want to position ourselves in a much better way to capture growing opportunities and expanding our presence across products, such as cross-border mergers and acquisitions (M&As), structured finance, private placements, domestic and international debt, and equity raising,” said Vedika Bhandarkar, managing director and head of investment banking for JPMorgan India Pvt. Ltd. Admitting that JPMorgan did explore acquisitions before deciding against them, Bhandarkar said the company is looking at ways to grow organically. “In this market, it’s easier to buy companies. But we had to look at the integration aspect also,” she said.
Over the past year, JPMorgan has expanded its presence in the domestic market through rupee debt financing deals for a few Indian firms and by handling local IPOs. “Till a few years back, investment banks didn’t need to have specialized teams, which could focus on offering a multitude of products. But that isn’t the case any more. As companies’ aspirations have grown, we need to be in a position to offer specialized solutions,” said Kaustubh Kulkarni, executive director (investment banking), JPMorgan.
JPMorgan has hired Cyrus Mehta from its London office to build the high-yield and leverage finance business; Ranjit Lakhanpal from Goldman Sachs to lead the M&A, equity and debt team; and Mehul Savla from ICICI Securities to expand its presence in the domestic equity market.