Mahesh Singhi, founder and managing director of Mumbai-based transaction advisory firm Singhi Advisors, is not a typical Ivy League-educated banker you usually come across in the fast-moving investment banking world. Nor is he an MBA or a CA, let alone studying at IIT or IIM or any fancy B-School, which is a basic qualification for an investment banker these days.
But Singhi, who speaks Rajasthani Hindi (he belongs to Jodhpur) interspersing it with English whenever necessary, runs one of the most successful mid-market investment banks in India which has closed over 100 transactions worth $5 billion in 18 sectors and many of them are cross-border deals. Singhi's story is as entrepreneurial as any of his clients he has helped raise capital or sell assets.
What made Singhi a successful banker is he himself works closely with his promoters to understand their company and help prepare the pitch and strategy rather than leaving it to analysts or junior bankers. "He still rolls up his sleeves and spends long hours as if he is still starting out," says a company promoter who has worked with Singhi.
“We are solution-driven. If our clients don’t listen to us, we end our relationship, because we are very realistic in our approach. If we start on a deal, then we close it,’’ says the soft-spoken dealmaker.
Singhi, who was born on August 1, 1965, had a very humble beginning before he accidentally stumbled upon investment banking as his calling. After completing his mechanical engineering degree from Jaipur's Malaviya National Institute of Technology,Singhi started his career with LML Vespa in Kanpur in 1987 at a starting salary of Rs 1,400. After a one-year stint at LML, Singhi moved for a brief period to Ferro Alloys, a rolling mill in Nagpur, before he left for Mumbai to start up on his own.
In January 1989, Singhi took a table space in an office complex at Bandup in suburban Mumbai and started providing consultancy to small engineering firms, advising them on maintenance of machinery and their optimal utilisation. In the same year, he floated Singhi & Associates that helped first-time SME entrepreneurs transform projects from concept to commissioning.
“I didn’t have a good job after completing my studies and came to Mumbai to set up a business. If you are from a middle-class family which doesn’t have much to lose, you can do anything. I didn’t have money; so I started with advisory,’’ Singhi says.
From 1992 to 1996, Singhi worked on scaling up his project consultancy work. “Until 1996, it was a one-man crew; later I started setting up a team,” he says. Soon the firm became a six-member team which started working with sick companies, helping them sell non-core businesses.
Venturing into financial advisory business
From project consultancy, Singhi slowly ventured into fundraising and later to the financial advisory business. In 1996, his company started offering loan syndication and project financing services, resulting in the first phase of growth for the firm. In 1999, 10 years after the company was founded, it entered venture capital advisory and distressed asset sales where it built a thriving practice.
One of the initial deals that proved the company’s mettle came from Pioneer Embroideries Ltd, a player in the embroidery space in India, which had plans to acquire Salzer Textiles, a part of the Coimbatore-based Salzer Group. The deal took 15 months to close and increased Singhi’s chances of success in the tough deal space.
Another deal that earned him a place among successful dealmakers was for Dubai-based Jumbo Group, founded by late Manu Chhabria, which wanted to sell a pump manufacturing unit. In a bidding war, the firm was pitched to Wilo AG of Germany, one of the world's largest pump manufacturers. The deal, which was the first cross-border one for Singhi Advisors, helped the firm establish itself as a serious player in the M&A space.
“By 2004, we were a full-scale investment bank; in the next three years, we opened offices in Delhi, Kolkata, Bangalore, Mauritius and Australia,” he says. Soon after expanding its presence, Singhi Advisors saw a host of deals getting signed, including the purchasing of a 15 per cent stake in Hakoba Lifestyle Ltd by Bennett Coleman & Co Ltd. Besides PE placements, it began advising on disinvestments and also handled structured fundraising for Ashoka Group and Vybra Automet Ltd.
The firm recently advised Australia's Linc Energy to sign a pact—which was worth $2.7 billion in cash and royalty—with Adani Enterprises, marking the largest investment by an Indian firm in Australia.
Singhi Advisors also acted as the financial advisor to Bhoruka Aluminium Ltd for sale of its aluminium extrusion business to YKK AP, part of YKK Group, a $6 billion Japanese major. The list of clients the firm has worked with also includes Aditya Birla Group, Bajaj Group, Sumitomo Chemical, Datamatics, IVRCL and Nimbus.
Focusing on M&As
As it grew, the firm changed its focus area several times and eventually shifted its priority towards cross-broader M&As. “Singhi has successfully transitioned from being a project advisory player. The real challenge is how to get into new product segments and expand to other regions of the country,’’ says C Venkat Subramanyam, founder and director of Veda Corporate Advisors Pvt Ltd, which competes with Singhi in the transaction advisory space. Subramanyam says Singhi Advisors also has to strengthen its abilities to withstand economic turbulences better.
Singhi is also a patient banker and sometimes he can wait as long as two years to fructify a deal. A case in point is the Rs 180-crore sale of media company Mid-Day Multimedia to Jagran Prakashan in 2010. Rajendra Agarwal, CFO, Jagran Prakashan, says. “The deal took close to two years to be completed, which indicates that Singhi Advisors does not rush through deals.”
Manajit Ghoshal, former CEO of Mid-Day, says, “Many a time, Singhi Advisors has been pitted against top investment banks but it came out on top due to the value it brings on the table.’’
A competitor, who did not wish to be named, said that Singhi Advisors "has managed to find the right gap in the market, but it will have to build a strong team to drive long-term growth.”
Interestingly, the firm—which had been conservative in its approach till now—has started aggressively hiring senior professionals as partners from some of India's leading consultancies and PE firms. Some of the recent hires include Krishna Kartha (from Emirates NBD, Dubai), Ashish Bagadia (Avendus Capital), Ashish Jain (Xander Advisors) and Sanjay Malhotra (SBI Capital Markets) as directors, across verticals such as wealth management and family office practice, hospitality and corporate real estate and PE backed corporate M&A practice.
Singhi is getting ready to scale up to the next level with these hires. Currently, 50 per cent of the deals bagged by the firm are cross-border transactions. “Forty per cent of the deals come from buy-side firms while the rest come from sell-side firms,’’ Singhi says.
According to the company, close to 70 per cent of its transactions are generated by its quick thinking. “We catch clients quite young and we ensure that they believe in us and want to work with us in the future,’’ says Singhi who expects the deal space to improve from the low seen in 2008-09.
Today, the firm's services include project appraisal, working capital finance, turnaround management, structured financing, private equity, valuation, due diligence and M&A.
While most companies talk about downsizing during a slowdown, Singhi talks about further expansion. With a team of over 40 professionals working across six offices in Australia, Mauritius and the UK besides those in India, Singhi feels his firm is positioned to offer clients seamless service and access to global opportunities.
“We are far from concerned about market conditions being good or bad. Our transactions are unique and we create our own deals,’’ says a confident Singhi.
(Edited by Joby Puthuparampil Johnson)