JM Financial Ltd. plans to expand its investment banking business as the firm expects dealmaking activity in India will remain vibrant for the years to come.
The Mumbai-listed company is seeking to hire at least seven senior investment bankers in the coming year for sectors such as industrials and digital technology, where companies are actively looking to raise funds, according to Vishal Kampani, non-executive vice chairman at JM Financial. The firm will also hire another 15 junior investment bankers in the associate and analyst ranks in the next two to three years, he added.
“We are planning to increase our corporate clients in the top and mid cap companies by five times to 2,000 in the next seven years,” Kampani said in an interview. Financial and structured credit companies are likely to be the next driver of India’s fundraising boom, he said.
India has been one of the rare hotspots for mergers and acquisitions as well as share sales in recent years as investors bet on the nation’s fast-growing economy. The South Asian country has seen more than $21 billion raised through sales of new and existing shares as well as rights offerings so far this year, data compiled by Bloomberg shows, defying a weak global market as interest rates jumped.
JM Financial is joining its peers such as Kotak Mahindra Bank Ltd. and Jefferies Financial Group Inc. in expanding the investment banking workforce in India. The country has emerged as the next potential growth engine for banks as economic concerns and geopolitical tensions cloud the prospect of China.
Indian companies could seek to raise between $30 billion to $40 billion every year through equity capital markets transactions, including block trades and qualified institutional programs, Kampani said.
“We expect capital market investments to be on fire in the next five years,” he added.
Wealth Management
Tracing its roots to 1973, JM Financial’s primary businesses include investment banking, mortgage lending, alternative and distressed credit as well as asset and wealth management, its website shows. Revenue from its investment banking division was about 4.95 billion rupees ($59 million) in the quarter ended Sept. 30., accounting for about 41% of the firm’s total revenue.Its shares have risen about 36% this year in Mumbai, giving it a market value of about $1.1 billion. Kampani is the son of JM Financial’s co-founder Nimesh Kampani. The younger Kampani joined JM Financial in 1997 as an analyst in the merchant banking division and has since worked across businesses within the group.
JM Financial is also looking to expand its wealth management business. The company will double the team to 120-people strong in the next five years, a move that would help boost its operating profit to 12 billion rupees during the same period, Kampani said. The operating profit for the unit last year was about 4.9 billion rupees.
“The need for private equity funds, corporates and institutional clients will drive this growth for us,” he said. “All our cylinders will fire to deliver this target.”
