New name on the door
Investment bank Jefferies eyes the Indian middle market.
The india growth story continues to impress multinational investment banks, who are queuing up for a slice of the Indian pie. The latest to join the bandwagon is US investment bank Jefferies. The firm is a full service investment bank and institutional services firm that offers services such as financial advisory, capital raising, mergers and acquisitions and restructuring to small and mid-cap companies. And India, with its high growth rates and quality companies looking to expand globally, is a market where Jefferies sees tremendous potential. Says Brian Friedman, Chairman, Jefferies and Company, Inc: “India already has a large number of dynamic middlemarket companies. It also has a sound legal and regulatory regime and hence is a key market for us.”
To begin with Jefferies will be opening a representative office in New Delhi with a team of nine professionals and would be looking to scale up operations gradually. Not that it is new to the game in India. The firm has had an India-dedicated team in its London office that has been striking deals for Indian companies recently.
In the past three years it has raised over $1.4 billion capital for Indian companies in international capital markets. It already has an impressive client list, including NDTV Networks, Adani Enterprises, Radico Khaitan, Zenith Infotech and Gitanjali Gems. Says Edward Males, Managing Director, Jefferies and Company, who heads Jefferies India: “What distinguishes us from other investment banks is that we are completely focussed on middle-market companies and hence can provide tailored solutions that they require.” In India, Jefferies is targeting companies in the technology, media, infrastructure, retail and consumer space—sectors it specializes in globally. Says Males: “Many Indian companies are now looking at international M&As and here we can play a key role given our global expertise and resources.”
Expanding in India is part of Jefferies’ global strategy to grow its operations outside the US, which still accounts for the bulk of its revenues (almost 85 per cent). The company has identified Europe and select markets in Asia as future growth drivers. While in Europe it’s targeting Germany and the UK, in Asia it is eyeing India, China and Japan. Says Friedman: “In future we want almost half of our revenues to come from outside the US and we see the highest percentage growth coming from the Asian markets.” To acquire scale in non-US markets rapidly, particularly Europe, the firm has been acquiring specialised boutiques—its most recent acquisition was of UK media boutique LongAcre Partners.
And Jefferies doesn’t rule out the possibility of adopting a similar strategy in India. Says Friedman: “An acquisition for us is a way of adding to our skills. We could do it in India as well.” Already Jefferies has been exploring the possibility of tying up with domestic investment banks and brokerages to serve clients more effectively in India. For instance, for two convertible issues, of $30 million and $50 million, for Zenith Infotech, it tied up with Keynote Corporate Services, a domestic investment bank, for providing domestic market research.
