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In a novel way of extending growth capital, the mid-sized investment bank Singhi Advisors, which is celebrating 25 years, plans to invest in at least 10 of its most-promising advisory client firms over the next two-three years by converting their fee income into equity.
The mid-market focused i-banker has already made three such investments in recent past in three companies it has advised, and holds equity stake varying between 2 and 10 per cent.
"We have already converted our fee income into equities in three companies. Having seen the success, now we are planning to widen this model by investing in around 10 companies whom we will be advising on various deals," Singhi Advisors Managing Director Mahesh Singhi told PTI.
He, however, explained that he has no plan to invest fresh capital in any manner but only will convert the fee income into equity.
Singhi, who holds 95 per cent in his company rest being given in Esops to key employees, refused to name the invested companies citing client confidentiality but said they are all mid-sized firms into chemicals and infra space.
Singhi said his company is the first to make such investments in the country even though some boutique i-bankers do pump in growth capital into their clients.
Singhi Advisors, which started off a quarter century ago from a small room in a northern suburb of the megapolis, has become a leading mid-sized i-banker now with 40 deal advisors across four offices in Mumbai, Delhi, Bangalore, and Australia.
The i-bank with 15 per cent stake in Mergers Alliance, the largest mid-market focused M&A advisory team, has closed over 1,000 deals worth $6 billion since inception, involving 20 countries across 18 sectors, he said.
The England-based Mergers Alliance will be holding its half-yearly summit in Mumbai next month.
