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Economic Times
a day ago
- Business
- Economic Times
Mizuho to acquire Avendus from KKR at $700 million valuation
iStock The deal will mark the biggest investment by Mizuho in India. Mumbai: Mizuho Financial Group is set to acquire KKR-backed Avendus Capital, valuing the homegrown investment bank at Rs 6,000 crore ($700 million), ending months of protracted negotiations with several twists and turns, said people aware of the matter. Mizuho Group CEO Masahiro Kihara is scheduled to visit the country later this week for official engagements and a formal announcement is due at that time, they said. Kihara is also director of Mizuho Financial Group Inc. Mizuho and KKR, along with the senior leadership of Avendus, agreed on final deal terms in the last few days, even as private equity group Caryle, the only other serious contender in the fray, was circling the deal will mark the biggest investment by Mizuho in India, underscoring the increased strategic interest of Japanese financial groups in the month, SMBC picked up a strategic stake in private sector lender Yes Bank. The transaction will include KKR exiting its entire 60% stake along with some of its earlier, high-net-worth individual investors and Ranu Vohra, as well as small shareholders, including local PE firm Gaja Capital. Vohra is one of the three founders of Avendus. Once completed, the transaction is likely to see the Japanese mega bank owning up to 70% of the investment 2015, KKR paid Rs 950-1,000 crore to pick up a controlling stake in Avendus Capital Pvt Ltd (ACPL) from Eastgate Capital Group Ltd and Americorp Ventures, early investors in Avendus via Singapore-based Red Point Investments Pte Ltd. The firm was founded in 1999 by three friends — Vohra, Kaushal Aggarwal and Gaurav Deepak. Other than Vohra, the other two are likely to remain invested and continue to run the company, retaining full operational control, though Mizuho will have veto of the hottest domestic deal shops in the country, Avendus operates in the financial services space through subsidiaries in financial advisory, capital markets, wholesale financing through Avendus Finance, wealth management and alternative asset management. The acquisition of Spark in 2022 led to the addition of institutional equities to the offerings. Avendus is present in 10 cities in India, the US and Singapore. A little over half of its profits before tax in the first nine months of 2025 came from the investment banking division, followed by credit solutions and institutional equities. ACPL posted a total consolidated income of Rs 1,035 crore and net profit of Rs 170 crore for the nine months to December 2024, against Rs 1,012 crore and Rs 118 crore, respectively, in exit, KKR is expected to make a blended 3.5x return in rupee terms over a nine-year and Avendus declined to comment. Mizuho India country co-head Piyush Aggarwal did not respond to ET's the past year, several PE funds and family offices had evinced interest in acquiring the business, including TPG Capital, TA Associates and Azim Premji family office PremjiInvest. Even Nomura, originally chosen to manage the stake sale process, threw its hat in the ring but eventually only Mizuho and Carlyle were left to compete. The mandate subsequently moved to Rothschild. 'There is a small difference in the valuation between the two but Mizuho brings a far larger strategic play and adds heft in cross-border transactions,' said an executive in the several investors, the inherent cyclicality associated with the investment banking business was a challenge. The acquisition of Spark has supported profitability through its equity capital market (ECM) products.'While the group reported strong performance in investment banking in fiscals 2022 and 2023, it was impacted in fiscal 2024 with extended deal completion timelines,' said a March Crisil credit report. 'There was some revival in fiscal 2025 with the nine-month revenue from IB (investment banking) surpassing the full fiscal 2024 revenue… The ongoing diversification in business should support profitability over the medium term.'One of Japan's largest financial institutions, Mizuho bought boutique investment bank Greenhill & Co in a $550 million deal in 2023, betting that the struggling group could help kickstart its ambitions in the US. The third-largest Japanese lender said it aims to sell 'strategic' shareholdings — stocks held to cement ties with corporate clients — worth at least ¥350 billion over the next three years through March 2028 amid the slump in long-dated Japanese Bank, the banking subsidiary of Mizuho Financial Group Inc, has had a presence in India for over 25 years, with five branches catering primarily to corporate clients. It has been looking to ramp up its local presence and hired private equity veteran and former India head of KKR Sanjay Nayar as external senior advisor to Mizuho Bank India. The parent has infused about $500 million (Rs 4,100 crore) into its India bank branches. Last year, Mizuho invested $145 million for a 15% stake in credit card issuer Credit Saison's Indian subsidiary Kisetsu Saison Finance (India).
Time of India
a day ago
- Business
- Time of India
Mizuho to acquire Avendus from KKR at $700 million valuation
Mumbai: Mizuho Financial Group is set to acquire KKR-backed Avendus Capital , valuing the homegrown investment bank at Rs 6,000 crore ($700 million), ending months of protracted negotiations with several twists and turns, said people aware of the matter. Mizuho Group CEO Masahiro Kihara is scheduled to visit the country later this week for official engagements and a formal announcement is due at that time, they said. Kihara is also director of Mizuho Financial Group Inc. Mizuho and KKR , along with the senior leadership of Avendus, agreed on final deal terms in the last few days, even as private equity group Caryle, the only other serious contender in the fray, was circling the prospect. The deal will mark the biggest investment by Mizuho in India, underscoring the increased strategic interest of Japanese financial groups in the country. Last month, SMBC picked up a strategic stake in private sector lender Yes Bank. The transaction will include KKR exiting its entire 60% stake along with some of its earlier, high-net-worth individual investors and Ranu Vohra, as well as small shareholders, including local PE firm Gaja Capital. Vohra is one of the three founders of Avendus. Once completed, the transaction is likely to see the Japanese mega bank owning up to 70% of the investment bank. In 2015, KKR paid Rs 950-1,000 crore to pick up a controlling stake in Avendus Capital Pvt Ltd (ACPL) from Eastgate Capital Group Ltd and Americorp Ventures, early investors in Avendus via Singapore-based Red Point Investments Pte Ltd. The firm was founded in 1999 by three friends — Vohra, Kaushal Aggarwal and Gaurav Deepak. Other than Vohra, the other two are likely to remain invested and continue to run the company, retaining full operational control, though Mizuho will have veto rights. One of the hottest domestic deal shops in the country, Avendus operates in the financial services space through subsidiaries in financial advisory, capital markets, wholesale financing through Avendus Finance, wealth management and alternative asset management. The acquisition of Spark in 2022 led to the addition of institutional equities to the offerings. Avendus is present in 10 cities in India, the US and Singapore. A little over half of its profits before tax in the first nine months of 2025 came from the investment banking division, followed by credit solutions and institutional equities. ACPL posted a total consolidated income of Rs 1,035 crore and net profit of Rs 170 crore for the nine months to December 2024, against Rs 1,012 crore and Rs 118 crore, respectively, in FY24. Upon exit, KKR is expected to make a blended 3.5x return in rupee terms over a nine-year period. KKR and Avendus declined to comment. Mizuho India country co-head Piyush Aggarwal did not respond to ET's queries. In the past year, several PE funds and family offices had evinced interest in acquiring the business, including TPG Capital, TA Associates and Azim Premji family office PremjiInvest. Even Nomura, originally chosen to manage the stake sale process, threw its hat in the ring but eventually only Mizuho and Carlyle were left to compete. The mandate subsequently moved to Rothschild . 'There is a small difference in the valuation between the two but Mizuho brings a far larger strategic play and adds heft in cross-border transactions,' said an executive in the know. For several investors, the inherent cyclicality associated with the investment banking business was a challenge. The acquisition of Spark has supported profitability through its equity capital market (ECM) products. 'While the group reported strong performance in investment banking in fiscals 2022 and 2023, it was impacted in fiscal 2024 with extended deal completion timelines,' said a March Crisil credit report. 'There was some revival in fiscal 2025 with the nine-month revenue from IB (investment banking) surpassing the full fiscal 2024 revenue… The ongoing diversification in business should support profitability over the medium term.' One of Japan's largest financial institutions, Mizuho bought boutique investment bank Greenhill & Co in a $550 million deal in 2023, betting that the struggling group could help kickstart its ambitions in the US. The third-largest Japanese lender said it aims to sell 'strategic' shareholdings — stocks held to cement ties with corporate clients — worth at least ¥350 billion over the next three years through March 2028 amid the slump in long-dated Japanese bonds. Mizuho Bank, the banking subsidiary of Mizuho Financial Group Inc, has had a presence in India for over 25 years, with five branches catering primarily to corporate clients. It has been looking to ramp up its local presence and hired private equity veteran and former India head of KKR Sanjay Nayar as external senior advisor to Mizuho Bank India. The parent has infused about $500 million (Rs 4,100 crore) into its India bank branches. Last year, Mizuho invested $145 million for a 15% stake in credit card issuer Credit Saison's Indian subsidiary Kisetsu Saison Finance (India).
Bloomberg
20-05-2025
- Business
- Bloomberg
Mizuho Waits for Next Opportunity After Cutting Bond Positions
Mizuho Financial Group Inc. is managing its securities portfolio 'very conservatively' as Japan's third-largest lender prepares for the next investing opportunity after shrinking its bond holdings. The bank wouldn't build up big positions until it is confident the Bank of Japan isn't likely to raise rates any more, Chief Executive Officer Masahiro Kihara said during a question-and-answer session with the media on Tuesday.
Asahi Shimbun
15-05-2025
- Business
- Asahi Shimbun
Japan's megabanks forecast more record profits despite tariff uncertainty
The signboards of three megabanks in Tokyo (Asahi Shimbun file photo) Japan's three largest banking groups posted record annual net profit in the last financial year, benefitting from increased corporate activity due to the end of deflation in Japan. The banks also expect to increase earnings this financial year--forecasting record profits once again--even though the economic outlook has been muddied by U.S. President Donald Trump's sweeping global tariffs. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group booked net profits of 1.86 trillion yen ($12.76 billion), 1.18 trillion yen and 885 billion yen, respectively, in the 12 months ended March 2025. The banks said the impact of the tariffs and the resulting uncertainty was already being felt, and was accounted for in their forecasts. Japan's largest lender MUFG cited a global economic slowdown, continued market volatility and lost trust in the U.S. dollar among risk factors, but nevertheless forecast a record net profit this financial year of 2 trillion yen. SMFG projected net profit of 1.3 trillion yen and Mizuho 940 billion yen, including downward adjustments of 100 billion yen and 110 billion yen, respectively, to account for continued uncertainty. Mizuho's pipeline of equity capital markets and mergers and acquisitions deals is currently backed up as shifting business conditions make decision making on large-scale investment challenging, Chief Executive Masahiro Kihara told a press briefing in Tokyo. But the banks expect Japanese companies to keep investing and each has extensive overseas operations across different financial services including retail and investment banking, asset management and wealth management. "We have operations across Japan, Asia and the Americas with varied sources of profit, so we are strong in any business environment," MUFG Chief Executive Hironori Kamezawa told a press briefing. MUFG owns 24% of U.S. bank Morgan Stanley, a business alliance that began in 2008. The holding contributed more than a quarter of MUFG's annual net profit. Asia has also been a growth market for the banks. Most recently, SMFG announced last week its acquisition of a 20% stake in Indian private lender Yes Bank. But the tariff uncertainty means SMFG too is holding off on further acquisitions, CEO Toru Nakashima said on Wednesday. Japan's banks have been among the largest beneficiaries of the end of deflation in Japan, which has encouraged Japanese companies to borrow to invest at home and abroad and carry out mergers and acquisitions. The return of inflation also pushed the Bank of Japan to end its policy of negative interest rates in March 2024 and hike rates twice thereafter, raising lending margins for Japanese banks.
Business Times
15-05-2025
- Business
- Business Times
Japan's megabanks forecast more record profits despite tariff uncertainty
[TOKYO] Japan's three largest banking groups posted record annual net profit in the last financial year, benefitting from increased corporate activity due to the end of deflation in Japan. The banks also expect to increase earnings this financial year – forecasting record profits once again – even though the economic outlook has been muddied by US President Donald Trump's sweeping global tariffs. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group booked net profits of 1.86 trillion yen (S$17.8 billion), 1.18 trillion yen and 885 billion yen, respectively, in the 12 months ended March 2025. The banks said the impact of the tariffs and the resulting uncertainty was already being felt, and was accounted for in their forecasts. Japan's largest lender MUFG cited a global economic slowdown, continued market volatility and lost trust in the US dollar among risk factors, but nevertheless forecast a record net profit this financial year of two trillion yen. SMFG projected net profit of 1.3 trillion yen and Mizuho 940 billion yen, including downward adjustments of 100 billion yen and 110 billion yen, respectively, to account for continued uncertainty. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Mizuho's pipeline of equity capital markets and mergers and acquisitions deals is currently backed up as shifting business conditions make decision making on large-scale investment challenging, chief executive Masahiro Kihara told a press briefing in Tokyo on Thursday (May 15). But the banks expect Japanese companies to keep investing and each has extensive overseas operations across different financial services including retail and investment banking, asset management and wealth management. 'We have operations across Japan, Asia and the Americas with varied sources of profit, so we are strong in any business environment,' MUFG chief executive Hironori Kamezawa told a press briefing. MUFG owns 24 per cent of US bank Morgan Stanley, a business alliance that began in 2008. The holding contributed more than a quarter of MUFG's annual net profit. Asia has also been a growth market for the banks. Most recently, SMFG announced last week its acquisition of a 20 per cent stake in Indian private lender Yes Bank. But the tariff uncertainty means SMFG too is holding off on further acquisitions, CEO Toru Nakashima said on Wednesday. Japan's banks have been among the largest beneficiaries of the end of deflation in Japan, which has encouraged Japanese companies to borrow to invest at home and abroad and carry out mergers and acquisitions. The return of inflation also pushed the Bank of Japan to end its policy of negative interest rates in March 2024 and hike rates twice thereafter, raising lending margins for Japanese banks. REUTERS
