Avendus expands in Europe as deals ‘increase’

Avendus, one of India’s biggest homegrown investment banks, is appointing its first London-based Europe head in the latest attempt by an Indian merger and acquisition advisory group to expand globally.

In an interview with the Financial Times, Ranu Vohra, chief executive of Avendus, and Robert Davis, the bank’s new Europe head, said the decision to expand the bank’s reach from Reykjavik to the Urals followed a significant rise in Indo-European deals.

Investment banks in India are seeking to build overseas networks to serve their mid-cap Indian clients, which are eyeing deals in developed markets, and overseas groups want to buy in India’s power, retail and IT industries.

“The market for Indo-European M&A is picking up,” said Mr Vohra. “Indian companies are desperately looking for opportunities outside India.”

In 2010 the number of cross-border deals between India and Europe rose to 94 deals compared with 74 in the previous year, according to Avendus data.

The bank, which has helped in big transactions recently, including advising India’s Patni Computer Systems on its $1.22bn acquisition of America’s iGate and the sale of IT outsourcer Satyam to Tech Mahindra, said it would target deals of $100m and above.

Mr Vohra said that Indian IT groups were aggressively scouting for opportunities in eastern Europe, Germany and the UK to service their clients in India.

Mr Davis, Nomura’s former head of European M&A, said he expected more deals between India and Russia in the consumer and industrial sectors, as well as more European companies buying in India.

“Five years ago everyone wanted a China strategy . . . now everyone needs an India or Brics strategy,” he said.

Avendus, which has its headquarters in Mumbai, is not the only Indian bank looking to build an international network.

Religare Capital Markets, backed by the Indian billionaire Singh family, has been expanding its operations in London, New York, Brazil, Turkey and South Africa, over the past year as it seeks to become a global emerging markets investment bank.

Other smaller Indian investment banks, which have been unable to establish a presence overseas, have started setting up joint ventures and alliances with counterparts in other emerging economies.

Edelweiss, a fast-growing Indian financial services group, has ties in South Africa, Latin America and with some boutique houses in Europe.

Indian banks are expanding overseas to service their domestic clients as they face more competition from global banks such as Citigroup and HSBC, which have significantly expanded their advisory operations in India over the past decade.