At a time when the uncertain macroeconomic environment has cast a shadow on India Inc’s fund-raising programme and the fee incomes of investment banks in the country, Deutsche Bank has emerged as one of the top arrangers.
The German bank had the highest share of investment banking fee income from equity capital market transactions last year and in January and February this year. In the debt capital market, it was among the top three investment banks, managing more than a third of the deals last year.
Veteran bankers Sanjay Agarwal, Sanjay Sharma and Ravneet Gill, spearheading the investment banking team, have been instrumental in securing deals for the bank.
Agarwal, managing director and head (corporate finance) in India, an investment banker for over two decades, was born in Kanpur and raised in Kabul, Afghanistan. Before joining Deutsche Bank in 2004, he worked with Goldman Sachs, Kotak Mahindra and ANZ Grindlays. He is married to Manisha Girotra, who, until recently, headed UBS operations in India.
Sharma, managing director and head (equity capital markets), Deutsche Bank India, joined the bank in 2007. He had earlier worked with Merrill Lynch, where he headed the equity capital markets business.
Together, Agarwal and Sharma have secured some marquee deals for the bank in the equity capital market space, including the initial public offerings of Coal India in October 2010 and Essar Energy in April 2010. Coal India’s $3.4-billion, or Rs 15,000-crore, initial public offering was the largest in India, while Essar Energy’s $1.95-billion fund raising programme was the largest initial public offering abroad by an Indian company.
In 2011, Deutsche Bank accounted for 5.21 per cent of the net revenue earned by investment banks in India from equity capital market transactions. The bank topped the table in terms of fee income, earning Rs 2.66 million in 2011. With a 60 per cent share of net revenue from equity capital market deals, the foreign lender was also ahead of its rivals in the first two months this year.
Speaking to Business Standard, Agarwal said, “The success of an issue always depends on pricing. If you get the price right, there will always be demand from institutional investors. We are now seeing a lot of companies looking to capitalise their balance sheets. Discussions (with clients) have resumed.”
In the debt capital market, the bank was among the top three arrangers, helping companies raise $985 million in 2011. It was the joint book runner for NTPC’s $500-million bond issue in July, the lead arranger for Adani Power’s $500-million syndicated term loan facility in June and the joint book runner for Tata Power’s $450-million subordinated debt in April.
Gill, managing director and head of capital markets and treasury solutions, has led the bank in this space. A banker with two and a half decades of experience, he is responsible for origination across financing, foreign exchange, interest rates, commodities and transaction banking.
He said, “Indian corporates are recognising de-leveraging on the part of banks would not be a short-term phenomenon. Therefore, these are looking to diversify their sources of funds — partly from banks and remaining from capital markets. If you look at the balance sheets of Indian companies, typically, 80-90 per cent of their borrowings are from banks. I think a 60:40 mix between bank debt and debt capital markets would be ideal in the world we are moving towards.”