US-based Signal Hill Capital Group LLC has started an investment banking advisory firm in India, according to a company release. Headquartered in Bangalore, the i-bank will focus on advising clients on IT, technology and education sectors.
Signal Hill Capital Advisory India Pvt Ltd has hired Klaas Oskam, director (investment banking) with Ernst & Young India, to head the new venture. With the sole focus on growth companies, the bank will also offer advisory services to companies on fundraising through private placement.
“Signal Hill India will initially provide advisory services, focusing on sell-side M&A services and private placement work in sectors such as IT services, BPO, mobile computing and mobile VAS, enterprise and infrastructure software, IT security, healthcare IT, Internet, e-commerce and education,” the official website says.
Apart from Oskam, George Anthraper and Meherzad Kelawala will also be part of the core team of Signal Hill in India. Anthraper is former director and head of India operations for Technology Holdings while Kelawala was the associate vice-president within the i-banking team of Ernst & Young India.
“Our decision to expand to India was driven by our expectation of significant, continued growth in this increasingly important and sophisticated market,” said Scott A. Wieler, chairman of Signal Hill Group. According to Wieler, the i-bank will leverage its domain expertise in technology globally, to tap clients in India.
With most of the foreign investment banks having set up shops in the country and niche domestic investment banks also being set up, India has become an overcrowded market in the last five years. While the niche investment banks with sectoral focus or pure advisory services have been able to grow in India, the bulge bracket investment banks have failed to make a mark. The drop in the overall revenue pool of the industry for CY2011 amply indicates that the big investment banks have not done well in India.
Joydeep Sengupta, Managing Partner (Asia-Pacific) for financial services at McKinsey & Co. said, “Considering the deal-making scenario is not all that good and the compensation of the bankers have also come down to reasonable level, this could be an ideal time for foreign investment banks to visit their India strategy.”
According to him, it’s a question of time frame at which you view the Indian market. “From the middle-to-long-term perspective, the Indian market looks promising for investment banking opportunities. The issue is not about opportunities but how you manage those opportunities in a sustainable way,” he added.