The best opportunities for JPMorgan in India are private equity deals, inbound acquisitions and, in future years, capital raisings for domestic banks, its India investment banking head said on Monday.
“Our focus is inbound activity and private equity deals from a strategic standpoint. There are a few large companies that do think this is a good time to make a move, provided the volatility settles down,” Vedika Bhandarkar, JPMorgan’s head of investment banking in India told Reuters on Monday. “Some of the private equity players are talking about buy-outs in the small to mid-scale, $100 to $120 million, range.”
Market volatility and a mismatch in valuation expectations between buyer and seller was the main culprit for the slowdown in private equity deals across India, but that gap “is steadily disappearing,” she said in an interview as part of this week’s Reuters India Investment Summit.
Another opportunity she spoke of was capital raisings for India’s domestic banks, given an increase in non-performing loans (NPLs). While NPLs for India and China’s major banks remain low compared to other countries, the consumer and corporate sectors are getting hit with tighter lending conditions.
“We expect bank capitalisation activity to become a focus in the 2010-2011 timeframe,” she said, explaining that for now banks are adequately capitalised, but will need to raise money as NPLs rise.