Funds from Eastgate Capital to be used for institutional broking business and expansion
MUMBAI: Avendus Advisors Pvt Ltd (AAPL) has raised Rs 100 crore to fund its expansion in the financial services arena. The money has been raised through a fresh issue of shares to Dubai-based Eastgate Capital Group.
As part of the arrangement between the two, Eastgate Capital’s director Rajiv Nakani will join the Avendus board.
According to Ranu Vohra, managing director and CEO, Avendus Capital, the development is purely an investment into the equity of the company. “We have been getting into newer businesses where the capital requirement is more. The funds raised will be utilised to strengthen the newly-launched institutional broking business besides undertaking international expansion particularly in the US and Europe amongst others,” Vohra said.
While the company’s primary activity includes advising clients on mergers and acquisitions (M&A), Avendus has been expanding into new services including the creation of a corporate debt and special solutions group that undertakes distressed asset financing and structured financing.
The M&A space, according to company officials, constitute about 70% of deals and the balance is primarily in private equity syndication. Specialising in cross-border deals the company has been primarily focussing on the US market with close to 90% of the transactions happening there. However, the management now plans to aggressively target the European market for cross-border M&As.
For Eastgate, the investment into Avendus marks its entry into the Indian market.
“Indian market is looking very interesting in terms of investments and we certainly will have more in the pipeline. The target companies for our investments will primarily be unlisted entities and the term of investment will be around 10 years,” Nasr-Eddine Benaissa, co-managing partner, Eastgate Capital, said.
Licensed by the Dubai Financial Services Authority (DFSA), ECG is a private equity subsidiary of NCB Capital. The company currently has $800 million in commitments under management across its three funds.
As for its investment plans in India, ECG will primarily focus on consumer centric sectors like education, healthcare, IT and ITeS. Vohra said the company will also benefit from Eastgate’s expertise. Vohra said that while acquisitions are an option, it will be done only on a case to case basis. “We will primarily look at organic growth,” he said.To a query on whether the funds being raised is a pre-IPO placement, Vohra said, “Going public is not in the pipeline though it will happen sometime at a very later stage.”
t_ashish@dnaindia.net
