Sanghi, appointed chief executive officer of Reliance Capital's Reliance Equity International unit, hired 40 researchers, salespeople and traders, including 10 former Deutsche employees, he said in an interview in Mumbai yesterday. Sanghi plans to increase the headcount to 100.
Deutsche, HSBC Holdings, CLSA, JPMorgan Chase & Co and Citigroup are among overseas companies that have lost executives over the past year to Indian brokerages offering sign-on bonuses and equity stakes.
India's benchmark Sensitive Index has tumbled 27 per cent this year, curtailing trading commissions and reversing six years of gains.
"With the backing of private equity, they have the capital and the people to compete with the foreign brokerages," said Punit Srivastava, an analyst at Enam Securities in Mumbai who covers Indian banks and finance companies. He rates Reliance Capital as an "outperform".
Citigroup's Indian broking unit earlier this year lost executives to Mumbai-based AnandRathi Financial Services, while HSBC's local equity sales team joined Antique Stock Broking. Last year, Indian Infoline hired CLSA's equity team with initial bonuses of as much as Rs 44 crore ($10 million) and the option to buy shares at below-market prices.
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Job cuts
The world's largest banks and finance companies, hit by credit losses and writedowns following the collapse of the US sub-prime-mortgage market, have cut more than 83,000 jobs over the past year, according to data compiled by Bloomberg.
"Markets and trading volumes will pick up toward the latter part of the year, though we may see some more pain in the near term," Reliance's Sanghi said yesterday. The company will start operations in August, he said.
Sanghi, Deutsche Bank's former managing director and head of equities in India, quit the German bank in March. Jason Collins, a Singapore-based spokesman for Deutsche Bank, declined to comment in an e-mail today.
Sarosh Irani, the former chief operating officer of Macquarie Bank's Indian brokerage, was appointed to the same position at Reliance Equity, Sanghi said. Varun Pardiwalla and Sudhanshu Bhuwalka, former Deutsche Bank employees, will be co- heads of sales at Reliance, while S Chandra and Manish Bhatia will lead trading groups.
Reliance Capital, based in Mumbai, operates the nation's largest money management firm. Its Reliance Money division is the retail-broking unit.