Yes focus on pvt equity, M&As

Bank to spin off investment banking into wholly owned subsidiary.

Yes Bank has decided to spin off its investment banking division into a wholly owned subsidiary. The move is aimed at reflecting the robust growth achieved by the division in clinching deals in private equity syndication, mergers & acquisitions (M&A) and initial public offerings (IPOs).

The bank is also planning to foray into institutional broking, and other related businesses under the new subsidiary.

Managing Director of the Investment Banking Group of the bank. Aditya Sanghi said that the division, which was ranked number one in M&A 'outbound cross border transactions' and number five in M&A 'overall' category last year by Bloomberg, also managed to stay in the top five for 'cross border M&A' and top 10 in 'overall' M&A this year.

The bank is backed by Rabobank, Citigroup and other international investors.

In the private equity syndication, Yes Bank completed five transactions during the last one month. Some of the deals carried out by the bank this year include advising First Flight Couriers in raising Rs 101 crore from Temasek, the Singapore government-controlled private equity fund, and advising Global Coal & Mining in raising $19 million from Samara Capital.

In the outbound M&A transactions, Yes Bank was ranked fifth this year, ahead of big names ABN AMRO, Credit Suisse, Macquarie Bank, Standard Chartered, Rothschild and Deutsche Bank.

In fact, as per the Bloomberg data, YES Bank stood number one in terms of the number of deals in this segment in January to August period, though UBS, Morgan Stanley and Citigroup are ahead in terms of the deal size.

Sanghi said the bank's strategy was to be a `trusted financial advisor at every stage of the business life cycle' of companies.

For instance, in the Suzlon case, YES Bank was involved since 2004, when the company raised $23 million as private equity funding. Ever since, it has been the advisor for the company in several of its transactions ranging from fund raising through IPO (Rs 1,496.3 crore ), FCCB ($300 million), and the Euro 465 million acquisition of Hansen Transmissions International in 2006.

Sanghi said the bank saw no slowdown in activities related to M&A and IPO in near future, despite the subprime concerns in the US.

"Indian deals are mostly corporate deals. We don't see any leveraged deals originating from India," he said, pointing out that the bank faced no problem in arranging an acquisition credit facility of Euro 1.2 billion for Suzlon Energy to fund its takeover of Repower Systems.

The bank completed the transaction in May, well before the US subprime issue snowballed into a crisis.