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February 01, 2009

Boutique I-Banks tightening their belts

The Mint has an article on how Boutique investment banks are bracing for the slowdown.
“Last year, a lot of investment bankers came up, few will be active in 2009, as the correction was too sharp and caught every one unaware,” says T.R. Srinivas, director, real estate and energy, Ozone Capital Advisors Pvt. Ltd.

...M&A activities will be more prominent this year as a number of companies that diversified into unrelated areas may look at opportunities to get out of them, they say. Mergers could also get triggered by necessity as a few companies may look at the option of liquidating assets to generate working capital.

“Last year, our revenues from PE/M&A were in the ratio of 50:50. This year we expect the ratio to change to 30/25:70/75, as PE deals will be less than M&A,” says Ozone Capital’s Srinivas. Experts say valuations are attractive among information technology service firms (as it will continue to grow at 20%) and quite a few mid-sized US companies are interested in acquiring Indian firms.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in