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Avendus Group in talks to acquire institutional equities biz of Spark Capital; may re-launch ECM practice

The decision follows a blitzkrieg of fund-raising by India Inc in 2021 with firms raising more than Rs 1 lakh crore via the IPO route, an all-time record for a calendar year.

January 30, 2022 / 07:09 PM IST
(Representative image)

(Representative image)

KKR-backed leading financial services firm Avendus Group has entered final stage discussions to acquire a significant majority stake in the institutional equities and research vertical of Chennai-based Spark Capital, multiple sources in the know told Moneycontrol.

“The transaction has reached the last leg and an official announcement can be expected shortly. The valuation is expected to be around Rs 300 crore,” said one of the persons above.

According to a second person, Avendus Group, which has presence in the areas of investment banking, wealth management, credit solutions and asset management, is keen on tapping the depth of research and the quality of people at Spark Capital.

“A big majority of revenues of Spark Capital come from the Institutional equities vertical. It can help Avendus Group achieve scale in the segment and will help them to provide knowledge based, value added solutions which is an area of focus for them,” a third person added.

According to its website, Spark Capital, a full service financial advisory firm, also offers investment banking, wealth management, asset management and structured finance advisory solutions.

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Additionally, a fourth person told Moneycontrol that Avendus Group is working on relaunching a full-fledged ECM (equity capital markets) practice within the next few months, which will provide IPO, QIP, rights issue, block deal advisory services.

The decision follows a blitzkrieg of fund-raising by India Inc in 2021 with firms raising more than Rs 1 lakh crore via the IPO route, an all-time record for a calendar year. More than a decade back, Avendus Group had provided ECM services to corporates and advised on IPOs ( TBZ – Tribhovandas Bhimji Zaveri, Parabolic Drugs to name a few) and QIPs (Nitco Tiles) but later shifted focus to other services.

“Especially in the tech, startup and VC space, over the years, Avendus has had a strong relationship with the firms, founders and investors and helped them with M&A and fund raising. It would make sense to move beyond assisting clients solely in the private markets space and also help them in their public market journey,” added a fifth person.

In 2021, as many as 11 domestic startups and tech firms, namely, EaseMyTrip, Nazara, Zomato, CarTrade, Freshworks, Nykaa, Fino, Policybazaar, Paytm, RateGain and MapMyIndia made public market debuts.

On January 28, Moneycontrol had reported that US investment bank Jefferies was eyeing an ECM push in India & S-E Asia and may poach Jibi Jacob of Edelweiss Financial Services.

A sixth person told Moneycontrol that Avendus Group had initiated discussions to get on board ECM i-bankers.

All the six persons above spoke to Moneycontrol on the condition of anonymity.

Moneycontrol is awaiting responses to email queries sent to Avendus Group and Spark Capital and has sent reminders. This article will be updated as soon as we hear from them.

According to the Spark Capital website, under the institutional equities vertical, its strength is South India and the mid-cap segment. The firm authors research on over 225 stocks across 12 sectors covering around 80 per cent of total market capitalisation. The sectors covered include financials and insurance, oil and gas, healthcare, automobiles, IT & ITES and others. A seven-member sales team covers close to 400 institutional clients across India, Singapore, Hong Kong, Taiwan, UK, Europe and USA. The website also mentions a cash market and derivatives trading and execution team with 11 sales traders.

Established in 1999 in Mumbai, Avendus is today present in 10 cities across India, US, UK and Singapore and its leadership team consists of Co-Founder & CEO Gaurav Deepak and Ranu Vohra, Co-Founder and Executive Vice Chairman.



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Ashwin Mohan
first published: Jan 30, 2022 07:05 pm
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