Avendus Capital to venture into NBFC biz

Avendus Capital, a boutique investment banking outfit, is venturing into institutional broking and capital market practices (IPO deals, open offer transactions) in a big way, anticipating a booming business, as more foreign investors route stock market trades through Indian outfits and local companies decide to tap the primary markets.

It also plans to enter the asset management and non-banking financial company (NBFC) businesses.

The company, which has carved a niche in the small and mid-market mergers and acquisitions (M&A) space and private equity transactions, is in the process of setting up a sales and research team for the institutional broking division, said Ranu Vohra, managing director and CEO of Avendus Capital.

To reflect the change in its approach, the company recently changed its name from Avendus Advisors to Avendus Capital.

It also hired Girish Nadkarni from IL&FS Investmart to head capital market practices.

The company expects increasing business in the institutional broking space as the recent curbs on participatory notes (P-notes) may force the foreign investors to route transactions through Indian brokerages.

Avendus Capital's entry into institutional broking coincides with similar moves by other players including BNP Paribas Securities (owned 50 per cent by Geojit Financial Services), India Infoline, JM Financial and Lehman Brothers (which bought the institutional business of Brics Securities).

"We already have relationships with hedge funds and other investor groups. The idea is to leverage the platform for institutional broking business," said Vohra, who along with Gaurav Deepak and Kaushal Kumar, quit Wall Street investment banks to form the company in 1999.

Several foreign investors have missed out on the Indian stock market boom as they were underweight on India. They will look to enter the domestic equity market in a big way next year, providing companies such as Avendus Capital "lot of opportunity and potential".

The company's institutional brokerage business is expected to be kicked off in February.