IDBI Capital CEO and MD Nagendra Bhatnagar said, "We are looking to strengthen our corporate advisory and mergers and acquisition business. We have done a lot of work for public sector undertakings (PSUs) and we are looking to strengthen our presence in it." A spokesperson for CARE confirmed the development as well, stating "regulatory issues" as the reason behind the decision.
The CARE spokesperson did not reveal the size or valuation of the advisory business. The three largest shareholders of CARE are IDBI Bank, Canara Bank and SBI. Others include Federal Bank, IL&FS, ING Bank etc, according to the CARE website.
Other rating agencies have also hived off their advisory business into separate subsidiaries. Crisil transferred its advisory business, Crisil Infrastructure Advisory and Crisil Investment and Risk Management Services into a 100 per cent subsidiary called Crisil Risk and Infrastructure Solutions.
Even Icra has floated a separate subsidiary called ICRA Management Consulting Services, which focuses on M&As, due diligence, bid advisory, corporate restructuring, cost reduction and others.
