Mizuho’s Avendus deal in India is said to stall on valuation

KKR bought a stake in Avendus in 2015 and invested more capital in the business in 2017.

Mizuho Financial Group Inc.’s efforts to buy a majority stake in Indian investment bank Avendus Capital Pvt have hit a roadblock over disagreements on valuation and the right exit option for the KKR & Co. portfolio company, according to people familiar with the matter.

Mizuho was on the verge of buying a majority stake in Avendus in what would be the latest acquisition by a Japanese bank in India, people familiar with the matter said in June.

While talks have hit a snag, considerations are ongoing and the parties are still trying to sign a deal, the people said.

Representatives for KKR, Avendus and Mizuho declined to comment.

The delay on the potential transaction was first reported by Moneycontrol.

Japanese lenders have been recently eyeing assets in India. A deal for Avendus would follow Sumitomo Mitsui Financial Group Inc.’s purchase of a 20% stake in Yes Bank Ltd. for about 135 billion rupees ($1.6 billion).

KKR bought a stake in Avendus in 2015 and invested more capital in the business in 2017. Since then the firm has also bolstered its wealth management, lending and equity capital market operations. The Avendus management team has a say in any transaction since they drive businesses including investment banking.

Last month, Avendus was at the center of one of India’s worst trading blunders in years after some of the company’s traders at unit Spark Institutional Equities Pvt. mistakenly executed an order to sell up to 24% of Clean Science & Technology Ltd. twice. The erroneous trade was reversed but it exposed a potential weakness in the country’s system for buying and selling large blocks of shares.

Mizuho had emerged as the frontrunner for KKR’s 63% stake in Avendus that valued the firm at about $800 million, Bloomberg reported in February. Other bidders for the investment bank included Nomura Holdings Inc. and Carlyle Group Inc., people familiar with the matter have said.

Mizuho has been pushing overseas and building out its businesses in India and the US. In the US it bought Greenhill & Co. in 2023, and in India it acquired a financial services startup last year.