Religare Capital Markets, backed by the Indian billionaire Singh family, is planning acquisitions in four developing countries over the next six to 12 months as it seeks to become a global emerging markets investment bank.
The move by Religare comes as homegrown investment banks in emerging markets are seeking to build overseas networks to serve their corporate clients, which are increasingly looking for acquisitions abroad.
Religare, which has already formed a joint venture in Turkey and acquired a presence in Sri Lanka, Singapore, Hong Kong, London and New York, is looking to buy investment banking or broking operations in Brazil, the Philippines, Indonesia and South Africa.
“We are seeking to become India’s first global emerging markets investment bank,” said Tarun Kataria, chief executive of Religare Capital Markets India.
Religare joins rivals in other emerging markets, such as Renaissance Capital in Russia and BTG Pactual in Brazil, which are also acquiring a presence in other fast-growing markets.
Religare could not disclose the size of the intended acquisitions but Mr Kataria said the group has invested $100m and plans to invest a total of $400m within the next 12-18 months.
Religare Capital Markets’ controlling shareholder, Religare Enterprises, is majority owned by billionaire brothers, Malvinder Singh and Shivinder Mohan Singh.
The Singhs raised $2bn from the sale of their stake in India’s biggest generic drugs maker, Ranbaxy Laboratories, to Japan’s Daichi Sankyo in 2008.
Religare in September agreed to acquire a 50 per cent stake in a Sri Lankan brokerage, Bartleet Mallory Stock Brokers, and in August bought the US and UK units of South Africa’s Barnard Jacobs Mellet for $7.3m.
In June, it bought Aviate Global (Asia), an equities business with offices in Hong Kong, Singapore and Melbourne, Australia and the same month formed a strategic alliance with Guaranti Securities in Turkey.
Religare has acquired 290 institutional investor clients from the acquisitions, Mr Kataria said.
The group will offer services ranging from mergers and acquisition advisory work to share offerings, and will target deals worth $300m and above.
India will remain the group’s homebase. It claims to have the largest retail broking market share in India.
Religare is not the only Indian homegrown bank looking to build an international network.
Raamdeo Agrawal, director of financial services group Motilal Oswal, said that Indian merchant banks with offices in emerging markets would be better positioned to win mandates from Indian companies.
“On a cross-border deal, an Indian corporate will always prefer to have at least one Indian investment banker advising him … it’s a cultural matter,” said Mr Agrawal.
In the last five years homegrown investment banks have been competing with global banks that have expanded their advisory operations in India.
Indian investment banks that have been unable to expand abroad through acquisitions have started to set up joint ventures and alliances with counterparts in other emerging economies.
“It is much more convenient to set up a partnership with an investment bank in Africa and South America than opening up an office there,” said Rashesh Shah of Edelweiss, an Indian financial services group.
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