The largest Japanese securities firm Nomura Group, which was last year negotiating to acquire a major stake in domestic investment bank Enam Securities, is now going solo in India.
According to a report in , Nomura is kicking off with an institutional brokerage business and has already put in place a team of seven people. The company has appointed Rahul Bhatt as head of sales trading and is in the process of getting regulatory approvals, the report said. It would get into the retail broking space either through the organic or inorganic route in the future.
Its talks with Enam failed to materialise reportedly due to differences over valuations and majority control. However, this did not stop Nomura to strike a non-binding MoU with LIC MF for acquiring a stake in LIC Asset Management Company. It could hold upto 26 per cent in this venture. Nomura, which was an advisor to Daiichi Sankyo on the Ranbaxy investment, is primarily engaged in activities like asset management, broking and investment banking globally.
Over the last few years a number of Wall Street investment banking firms like Merrill Lynch (bought out Hemendra Kothari’s majority stake), Goldman Sachs (went solo after exiting a joint venture with Kotak Mahindra) and Morgan Stanley (bought out Nimesh Kampani in their JV who later formed a separate business) have strengthened their positions in the Indian financial services market.
Incidentally for Nomura this would mark a reentry into the country. The firm had an Indian presence but had folded operations in the mid-1990s. Some of the other Japanese financial services firms who have presence in India include Daiwa Securities Group, Nikko Cordial Group and Mitsubishi UFJ Securities.
Meanwhile, in a related report last week, Nomura Asset Management, Japan’s largest money manager, said it was looking to expand into retail fund markets in Asia. Reuters quoted Takahide Mizuno, CIO of the asset management unit of Nomura Holdings, as saying that the the firm will look at expanding through joint ventures or other alliances in countries like India and China. He said these countries are “with unique cultures and unique regulations”.
Mizuno told Reuters: “At some point in the future, India will become a candidate for an overweight position.” Nomura Asset, which has plans to grow that fund to about 100 billion yen, will start with Japan-focused funds and then expand its product lineup to Asia-wide funds, Mizuno said.
Nomura Asset had 24.3 trillion yen (115.2 billion pounds) in assets under management as of March 31, 2008.