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INVESTMENT BANKING
An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions, and provide ancillary services such as market making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities. There are two main lines of business in investment banking. Trading securities for cash or for other securities (i.e., facilitating transactions, market-making), or the promotion of securities (i.e., underwriting, research, etc.) is the "sell side", while dealing with pension funds, mutual funds, hedge funds, and the investing public (who consume the products and services of the sell-side in order to maximize their return on investment) constitutes the "buy side". Many firms have buy and sell side components. An investment bank can also be split into private and public functions with a Chinese wall which separates the two to prevent information from crossing. The private areas of the bank deal with private insider information that may not be publicly disclosed, while the public areas such as stock analysis deal with public information. An advisor who provides investment banking services in the United States must be a licensed broker-dealer and subject to Securities & Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) regulation.
The role of the investment bank begins with pre-underwriting counseling and continues after the distribution of securities in the form of advice
INTRODUCTION
Kotak Investment Banking is a subsidiary of Kotak Mahindra Bank Limited, one of Indias leading banking and financial services organizations with a consolidated net worth of Rs 11,893 crore (approx US$ 2.4 billion) as on September 30, 2011. Kotak Investment Banking offers the complete breadth and depth of high-quality financial advisory services and capital market solutions to domestic and multinational clients across sectors. Our services include Equity and Debt Capital Market issuances, M&A Advisory, Private Equity Advisory, Restructuring and Recapitalization services, and Infrastructure Advisory & Fund Mobilization. The firm has a deep understanding and strong domain knowledge of all major industry sectors through a team of dedicated sector experts. STRENGTHS A solid reputation for unmatched advisory services and deal execution skills, which is reflected in our continued leadership on the league tables for both Equity offerings and M&A transactions An in-depth understanding of the local market and intimate knowledge of industry verticals through dedicated sector experts Our values focused on maintaining the highest ethical standards and our approach in always keeping our clients interests first The ability to leverage the Groups intellectual capital and wide-ranging experience to customize innovative solutions for our clients
Strong relationships with all the leading business houses in India cultivated through several years of client servicing
Kotak Investment Banking affiliates in USA and UK were the first Indian owned companies to register with FINRA (formerly NASD) in the US and the Financial Services Authority (FSA) in the UK. The firm is also a member of the National Stock Exchange of India, wherein it executes, clears and settles cash, futures and options transactions for clients.
SERVICES OFFERED
Equity Capital Markets Mergers and Acquisitions Private Equity Advisory Restructuring Advisory Infrastructure Advisory
IPOs
Muthoot Finance: In 2011, Book Running Lead Manager, Rs. 9 bn Future Ventures: In 2011, Book Running Lead Manager, Rs. 7.5 bn Coal India: In 2010, Book Running Lead Manager, Rs. 152 bn Jaypee Infratech: In 2010, Book Running Lead Manager, Rs. 22.3 bn SKS Microfinance: In 2010, Book Running Lead Manager, Rs. 16.3 bn DB Realty: In 2010, Book Running Lead Manager, Rs. 15 bn Prestige Estates Projects: In 2010, Book Running Lead Manager, Rs. 12 bn Oberoi Realty: In 2010, Book Running Lead Manager, Rs. 10.3 bn
FPOs
Tata Steel: In 2011, Book Running Lead Manager, Rs. 34.8 bn NMDC: In 2010, Book Running Lead Manager, Rs. 99.3 bn NTPC: In 2010, Book Running Lead Manager, Rs 84.8 bn Rural Electrification Corporation: In 2010, Book Running Lead Manager, Rs 35.3 bn
QIPs
M&M Financial Services: In 2011, Book Running Lead Manager, Rs. 4.3 bn Adani Enterprises: In 2010, Joint Global Coordinator and Book Running Lead Manager, Rs. 40 bn Bharat Forge: In 2010, Joint Global Coordinator and Book Running Lead Manager - first-ever simultaneous yet unlinked issuance of Equity and NonConvertible Debentures + Warrants in India, Rs 6.2 bn Godrej Consumer Products: In 2010, Book Running Lead Manager, Rs. 5.3 bn Strides Arcolab: In 2010, Book Running Lead Manager, Rs. 4.6 bn Jubilant Organosys: In 2010, Book Running Lead Manager, Rs. 3.9 bn Jyothy Laboratories: In 2010, Book Running Lead Manager, Rs. 2.3 bn
Mahindra Forgings: In 2010, Book Running Lead Manager, Rs. 1.8 bn HDFC: In 2009, Book Running Lead Manager - QIP of NCD with Detachable Warrants, Rs. 43 bn Housing Development & Infrastructure: In 2009, Joint Global Coordinator and Book Running Lead Manager, Rs. 16.9 bn GVK Power & Infrastructure: In 2009, Joint Global Coordinator and Book Running Lead Manager, Rs. 7.2 bn Cipla: In 2009, Global Coordinator and Book Running Lead Manager, Rs. 6.8 bn LIC Housing Finance: In 2009, Global Coordinator and Book Running Lead Manager, Rs. 6.6 bn PTC India: In 2009, Joint Global Coordinator and Book Running Lead Manager, Rs. 5 bn Nagarjuna Construction Company: In 2009, Global Coordinator and Book Running Lead Manager, Rs. 3.7 bn
Landmark Transactions
Coal India: Largest IPO in India till date, Rs 152 bn SKS Microfinance: First ever Initial Public Offer by a Microfinance Company in India Bharat Forge: First ever simultaneous yet unlinked Issuance of Equity and NCD + Warrants through a Qualified Institutional Placement NTPC: First FPO under alternate book building route Standard Chartered: First ever issuance of Indian Depository Receipts (IDRs) HDFC: First ever QIP of NCD with detachable warrants State Bank of India: Largest ever Equity Issuance in India, Rs. 167 bn DLF: Largest Real Estate IPO in India till date, Rs. 91.9 bn Adani: Largest QIP transaction till date, Rs. 40.0 bn
Hughes Software Systems: First Book Built IPO Maruti: First French Auction in Asia HCL: First issue under 10% dilution guidelines Maruti: First Book Built IPO with stand by underwriting; IFR Deal of the Year
Buy-side Transactions
Sumitomo Corporation: In 2011, Acquisition of minority stake in VA Tech Wabag by Sumitomo Corporation Bombay Stock Exchange: In 2010, exclusive advisor to BSE for acquisition of majority control in CDSL
Mahindra: In 2010, exclusive advisor to M&M Limited for acquisition of ~5.5% stake in Tech Mahindra Limited from BT Telecommunication, US$ 101 mn Cipla: In 2010, exclusive advisor to Cipla Limited for acquisition of Meditab Private Limited, US$ 29 mn Tech Mahindra: In 2009, Tech Mahindra acquired Satyam Computer Services for US$ 591 mn. Kotak provided the entire suite of services from advisory and financing to execution and open offer management
Sell-side Transactions
Ispat Industries: In 2010, exclusive financial advisor to Ispat Industries for strategic stake sale to JSW Steel through a preferential issue of shares, US$ 480 mn Kotak Mahindra Bank: In 2010, Financial Advisor for preferential allotment of 4.5% stake by Kotak Mahindra Bank to SMBC, a unit of Sumitomo Mitsui Financial Group, US$ 297 mn Cipla: In 2010, exclusive financial advisor to Cipla for sale of all Intellectual property rights in India related to Ciplas "i-pill" brand to Piramal Healthcare for an aggregate consideration of US$ 21 mn
Restructuring Transactions
Orient Paper & Industries Limited: In 2011, Exclusive Restructuring Transaction Advisor to Orient Paper & Industries Limited for the demerger of cement business Jubilant Organosys: In 2010, Business Restructuring and Fairness Opinion DLF: In 2009, transaction advisor and independent valuer for the integration of promoter held Caraf Builders & Constructions Private Limited (along with DLF Assets Private Limited - DAL) with DLF Cyber City Limited, a wholly owned subsidiary of DLF Reliance: In 2009, in the largest-ever M&A transaction in the history of corporate India, Kotak acted as transaction advisor for the amalgamation of Reliance Petroleum Limited with Reliance Industries Limited in a US$ 1752 mn deal Godrej Consumer Products: In 2009, transaction advisor and provider of fairness opinion for the consolidation of Godrej Groups FMCG business into Godrej Consumer Products Ltd. Deal size worth US$ 160 mn
Cross-Border Transactions
SBS Holdings: In 2011, SBS Holdings Inc acquired 80% stake in Atlas Logistics Limited. Kotak Investment Banking and GCA Savvian (our alliance partner) jointly advised SBS Holdings on the transaction. Tube Investments of India: In 2010, Tube Investments of India (TII), a Murugappa Group company, acquired 77% stake in Sedis, a leading European manufacturer of industrial and auto chains based out of France. Kotak Investment Banking was the exclusive financial advisor to TII CRH: In 2008, managed the entry of buildings materials major, CRH, into India by acquiring a 50% stake in My Home Industries for US$ 448 mn
Landmark Transactions
Kokuyo - Camlin: Joint Venture between Kokuyo Ltd. and Camlin Ltd Ispat Industries: Preferential Issue of Equity Shares to JSW Steel; First of its kind partnership between two domestic steel majors (US$ 480 mn) Zee: Zee Entertainment Enterprises Limited acquired 6 regional channels from Zee News Limited Tech Mahindra: Acquisition of control of Satyam Computer Services Limited by Tech Mahindra Limited through a competitive bidding process, US$ 591 mn Reliance Industries and Reliance Petroleum: Largest ever M&A transaction in the history of Corporate India, US$ 9.4 bn*
Mahindra & Mahindra: Acquisition of 51% stake by M&M in Chinas 3rd largest tractor company Wal-Mart: Entry of Wal-Mart into India and JV with Bharti Group Bombay Stock Exchange: First and only demutualization of stock exchange in India, US$ 500 mn Anchor - Panasonic: Largest Japanese investment in India at the time of the deal, US$ 480 mn Hutch - Vodafone: Largest telecom M&A transaction at the time of the deal, US$ 10,829 mn
FSG is a trusted advisor to most leading funds investing into India and takes a relationship rather than a deal specific approach to building and nurturing its relationships. The team also helps its fund clients & corporates leverage the vast sector & technical product expertise of the wider Kotak Investment Banking and Kotak Group platform.
Restructuring Advisory
The Recapitalization and Restructuring group provides the complete array of advisory solutions for corporates in financial difficulty.
Led by an experienced team with a proven track record in restructuring advisory, the firms expertise in understanding client needs in detail helps in designing innovative, customized & timely solutions and effectively implementing them.
The team specializes in:
Financial Restructuring / One Time Settlement through Bilateral negotiations / Corporate Debt Restructuring mechanism / Board for Industrial and Financial Restructuring platform / Restructuring under High Court route with lenders Business and Corporate restructuring through demerger, hive-offs and subsidarisation Unlocking value from non core assets Sourcing and arranging Private and Institutional Equity for distress companies Sourcing and placing Private and Institutional Debt for distress companies Alternative sources of capital convertibles, mezzanine funding etc Family Dispute Settlement Strategize, design and execute amicable solutions in relation to property, assets and businesses Equity / Debt resolution Emphasis on shareholders right and assistance of regulatory bodies to resolve equity investments Resolution through legal remedies, security enforcement and encashment in debt
Key Deals
Some of the most complex restructuring transactions undertaken include:
In 2008, sole advisor to a leading plywood company for its restructuring and recapitalization. The banking community comprising 15 lenders recovered more than Rs. 1.5 bn from a sick company, which was unable to meet its obligations for the previous seven years. In addition, advised the company for raising finance to meet past liabilities and recommence operations In 2008, recapitalization of a chemical and logistics company with over Rs. 4 bn of debt, involving more than 15 lenders. Kotak was the sole advisor for the recapitalization transaction
In 2007, sole advisor to an emerging North India-based hospitality company for structuring the transaction with the investor In 2006, acted as an advisor to one of the highly reputed names in the FMCG industry and worked out a family dispute settlement In 2006, one of the leading players in the exterior paints industry was in deep stress with debt in excess of Rs. 2 bn and an asset value of Rs. 0.40 bn. Kotak was the exclusive advisor to the company for its restructuring and recapitalization leading to its turnaround In 2006, sole advisor to a leading machine tool manufacturing company saddled with debt of approx Rs. 8 bn mainly due to delay in project execution and arranging working capital funds. Kotak acted as sole advisor to the company for a settlement with large public sector banks and NBFCs In 2001, sole advisor to a NBFC group to resolve a corporate dispute with two leading Indian corporate
Infrastructure Advisory
Kotak Investment Banking has formed a dedicated Infrastructure Group to provide the entire gamut of investment banking solutions to public and private sector corporates across sectors like
Power (Generation & Associated Coal Mining, Transmission and Distribution), Transportation (Roads, Seaports, Airports & Railways), Urban Infrastructure (Car Parks and Water & Sewerage etc) and Urban Transportation (MRTS, LRTS, Hi-Speed Rail Links). The infrastructure team has over 50 years of collective experience in the Infrastructure space and comprises professionals with a strong background in project level advisory, investment banking, resource mobilization, and development of infrastructure projects.
one of the largest private equity investments in Indias power sector and is Temaseks first investment in the power generation sector in India.
Industry Coverage
Automobiles & Auto Components Banking & Financial Services Chemicals Construction Consumer Emerging Sectors Healthcare & Pharmaceuticals Industrials & Engineering Infrastructure Materials Media & Entertainment Real Estate Resources Retail Technology Telecom Transportation & Logistics