Will expand presence, BFSI to be one of our focus areas

By: |
Updated: August 16, 2016 7:23:38 AM

Founded in 1974 in South Africa, Investec is a specialist banking group providing a diverse range of financial products and services to clients across geographies.

Investec has business presence in India for more than a decade, primarily through the aviation sector, and we continue to play a role in financing of leased aircraft. (Source: Website)Investec has business presence in India for more than a decade, primarily through the aviation sector, and we continue to play a role in financing of leased aircraft. (Source: Website)

Founded in 1974 in South Africa, Investec is a specialist banking group providing a diverse range of financial products and services to clients across geographies.

The bank has been in the forefront of several leveraged buyout transactions across the globe, including India. Sudhir Dash, managing director of Investec India, in an interview with FE’s Deborhsi Chaki talks about the bank’s growth strategy in India and its key focus areas. Excerpts:

Investec has been present in India since 2011. What has been your key focus area so far?

Investec has business presence in India for more than a decade, primarily through the aviation sector, and we continue to play a role in financing of leased aircraft. We set up our office and hired a team around 2011 to work with
local clients, while at the same time, leverage our learning and skills in other geographies.

During the last five years, we enhanced our offerings to include corporate finance advisory, fixed income and more recently, securities/institutional broking. On the banking side, we have organised ourselves to focus on a few sectors including BFSI, infrastructure (power – both conventional and renewable, road and EPC) cement, auto, IT and e-commerce. While we have significant understanding of the resources sector and concluded a few transactions, we don’t see major activity in that space in near future.

Cumulatively, we have worked on and concluded more than 40 transactions both in corporate finance and fixed income and have established ourselves as a bank that works to provide creative solutions. We are certainly among leading banks in India in the power, e-commerce, structured finance and sponsor financing space. We will expand our presence into few other sectors and BFSI will be one where we intend to have a key role.

Indian banking sector has been badly hit by growing NPAs. Where does Investec find itself?

Yes, last few years were very turbulent for companies with leveraged balance sheets, and this significantly impacted the banking sector. Coupled with this, the difficult regulatory framework made it more challenging for banks to recognise and realise stressed assets. The recent initiatives by the government are helping create an environment that can ease the churn of these assets and help banks to free up capital. This has created opportunities for global financial houses like our’s. We are evaluating this and hopefully will have a clear strategy sometime soon.

Investec has been a part of several large leveraged buyout deals by PE funds. Are you open to more such opportunities? If yes, which sectors?

Providing leveraged finance to buyout funds is synonymous with our strategy in other markets where we have worked with global buyout funds to acquire local assets. Invariably, the assets that these funds acquire are high in quality and have very low project risk.

At the same time, the funds work to a clear strategy to get an exit and that adds to the comfort of the financier. We continue to work with almost all the global as well as local buyout funds to help them leverage acquisitions and will continue to do so in future. From the financing point of view, we are quite sector-agnostic, but do evaluate diligently
the quality of assets and the strategy of the fund to provide liquidity. Having said this, we will not be keen to participatein sectors that are cyclical or technologies that could be termed obsolete.

Investec has significant banking presence in Europe and Africa. Are there plans to apply for wholesale banking licence in India?

We do not have any plan to seek a banking licence in India at this point of time, though we won’t rule that out in future. Currently, we are a merchant bank and we advise our clients on fund raising and corporate finance.

To the extent that we selectively provide financing, it is for international situations that Indian businesses get involved in and these exposures are booked in our UK balance sheet. We also have a debt FII licence which we use from time to time to assist our clients in structuring and facilitating transactions.

What are the other businesses Investec is looking to pursue in India?

Globally, Investec has three significant business verticals – wholesale banking, asset management and wealth advisory. While we are part of the bank, the asset management arm has presence through its FII investment portfolio. We are constantly evaluating the emerging opportunities in India and mapping them to our global skill sets. At an appropriate time, we will expand our presence in other banking services, where we believe we will be more relevant to local wholesale clients.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1ESAF Small Finance Bank net profit up 111% in FY 20
2Sundaram Finance reports Rs 131 crore net profit in Q4
3RBI fines Citibank Rs 4 crore for non-compliance of regulatory directions