Investment Banking interview Archives | Imarticus

M&A Deals in India – March edition

M & A

by Sonya Hooja.

On popular request and back of the PE 2015 performance analysis, we are back with key deals for March 2016 along with a few pointers that should help you with deal analysis in any forthcoming interviews; this will help you be relevant.

1) Edelweiss buys JP Morgan’ India mutual fund business, subject to regulatory approvals.

Amount: Undisclosed

Reason: Expand Edelweiss’s increasingly growing asset management business, adding over Rs 7000 crore to the Investment banks AUM.The deal includes the acquisition of onshore fund schemes and the international fund of funds.
Further Analysis: JP Morgan joins Nomura, Deutsche Bank, Goldman Sachs and Morgan Stanley in exiting this sector. Birla bought ING Mutual Fund and Kotak bought Pine Bridge. For starters, none of them have been able to break the top 5 and these are firms whose basic philosophy is ‘Go big or go home’.  A Rs 8000 crore AUM would translate into a minisnule profit that really doesn’t justify further investment. Our products are much too basic and HDFC and ICICI’s distribution clout much too big to match.

2) Samsonite acquires luxury luggage rival Tumi

Amount: $1.2 billion

Reason: Obtain a stronger position in the market, and also enter the high-end luggage market. Also, leverage various synergies such as sourcing, logistics, sales, marketing, distributors etc.

Thought: India has a fairly fragmented luggage market – what will be the impact of two such big rivals coming together? Samsonite has decided not to bring TUMI to India yet because of its experience with Black Label and plans to focus its efforts on making American Tourister India’s biggest luggage brand.

3) Bigbasket raises funds from UAE based Abraaj and IFC

Amount: $150M

Reason: Expand into existing markets, establish a presence in Tier II cities across India and increase the product range offered to customers

Thought: How will this impact its two competitors, Grofers and Peppertap? How should their strategy change in the light of this fund raise? Will Biyani be tempted to enter?

4) UAE’s e-com venture Souq raises record $275M from Tiger Global, Naspers & others, the largest financing of an e-commerce business in the Middle East region.
Amount: $275M
Reason: This investment will support the company’s growth, strengthen e-commerce in the region and empower more businesses to grow online through Souq.com’s platform.
Futher analysis: The middle east e-commerce market has grown at around 1500% and is forecasted to touch around 12 billion in 2015; the Indian e-commerce market touched around $2.5 billion dollars in 2015. What do you think the future is for Indian e-commerce in the Middle East?

5) And our very own, Imarticus Learning also completes a fund raise from VC Firm Blinc and several other individual investors.

Amount: Undisclosed
Reason: Expand its product portfolio and gain foothold in the lucrative online education market and establish itself as India’s leading professional E-Tech firm in Financial Services and Analytics.

Wrm-ifapite into us at [email protected] or comment below and we will be happy to hear your thoughts on this. Join our active discussions on various deals in our Imarticus Financial Analyst Program, our financial analyst course, coming up at the end of month!

 

  • March, 31st, 2016
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M&A Deals in India – February edition

M & A

By Sonya Hooja.

So you’ve read the Vault guide from front to back, tackled our extensive interview sample question database and printed out your cheat sheet, yet you still feel unprepared for your Investment Banking interview once you have done an investment banking course in India. Investment banking interviews are notorious for their unpredictability. One time you probably get asked about the CAPM and the other time, she spends an hour discussing the latest headlines. But a question we know that get’s asked for sure is “Tell us about recent deal that has happened in the M&A space in India”.

 

So here at Imarticus, school of investment banking, we plan to make it easy for you. Every month we will spell out some of the biggest deals that have happened and try and understand their rational, giving you a starting point for your research.

 

2015 wasn’t the greatest year for Indian M&A. According to a Thomson Reuters M&A report, the value of M&A deals involving Indian companies amounted to $35.1 billion in 2015, a 4.8% fall compared to 2014. While domestic activity was muted, cross-border activity increased 73.1% to $23.2 billion compared to 2014 with Indian companies leading the way. 2016 is hoping to witness a bounceback and here are five interesting M&A deals that led the way in February 2016.

 

  • IIFL Wealth Management buys NBFC Chephis Capital

IIFL Holdings Ltd’s (formerly India Infoline) wealth management unit IIFL Wealth Management Ltd has acquired the non-banking finance company Chephis Capital Markets Ltd, according to a stock market disclosure. Following the acquisition, Chephis has become a wholly owned subsidiary of IIFL Wealth Management.

 

Amount: Rs. 50 crore

Stated Reason: Continued growth and platform expansion

Question for futher analysis: Where do you think wealth management business is headed in India?

 

2) Wipro Ltd, India’s No. 3 software services exporter buys US-based HealthPlan Services in its second-biggest acquisition ever and its first acquisition since Abidali Neemuchwala took over as CEO.

Amount: Rs. 3130 Crore

Reason: Expand Wipro’s offerings in the US health insurance market

Question: Is this part of their ‘String of pearls strategy’? What is a ‘string of pearls’ strategy?

 

  • And here’s Wipro again with its aggressive acquisition strategy this quarter. Wipro is acquiring New Jersey-based Viteos Group, who provides customized straight-through-processing and integrates post-trade operations across the alternative investment management industry in the United States, Europe and Asia.

 

Amount: Rs. 820 Crore

Reason: Increase its portfolio in the Capital Markets and Asset Management industy

Question: Viteos was valued at 5 times their revenue…is it worth it?

 

 

 

  • IL&FS Transportation Networks sells a 49% stake in Rapid MetroRail Gurgaon, however the buyer is unknown!

 

Amount: Rs. 509.90 crore

Reason: Undisclosed

Further Analysis: Since there has been no official rationale, we can only conclude investors like Standard Chartered IL&FS Asia Infrastructure Growth Fund and Bessemer Venture Partners were perhaps ready to exit but since we have no details, it’s all a guess work.

 

5) And lastly, E-commerce giant Amazon Inc buys a 26% stake in Westland, best known as the publisher of Indian authors including novelists Amish Tripathi and Ashwin Sanghi.

Amount: 9.4 Crore

Reason: Expand its international reach, and grow its physical and digital book businesses.

Further Analysis: If Amazon bought a 26% stake for 9.4 crore, that means Westland was valued at Rs 36 crores. How would you go about finding out the valuation multiples?

 

Wrm-ifapite into us at [email protected] or comment below and we will be happy to hear your thoughts on this. Join our active discussions on various deals in our Imarticus Financial Analyst Program, our financial analyst course, coming up at the end of month!

 

 

  • February, 27th, 2016
  • Posted in