MIZUHO Financial Group is considering making a push into a new area for the lender in India focusing on private equity and venture capital firms, seeking to tap some of the most prolific dealmakers in the country.
Japan’s third-largest bank has held internal discussions on targeting this segment and is drawing up the potential talent pool that could lead this initiative, according to sources familiar with the matter. The bank is looking to launch the effort as soon as next year, said the sources, who asked not to be identified citing private information.
The bank’s plan to target so-called financial sponsors – firms that invest in private businesses – mirrors efforts by global banks such as JPMorgan and Deutsche Bank as well as domestic lenders such as Kotak Mahindra Bank and Axis Bank.
A Tokyo-based spokesperson for Mizuho spokesperson declined to comment.
Establishing relationships with financial sponsors can open the door for banks to service various business and personal needs. This could include arranging debt funding for their portfolio companies, advising on follow-on acquisitions or share sales as well as managing wealth when dealmakers strike gold.
Financial sponsors have been one of the biggest dealmakers in India, accounting for around US$39 billion of transactions in private equity and venture capital firms in 2023, according to a Bain and Company report. They were active in exiting their portfolio companies too, with the value rising nearly 15 per cent to about US$29 billion last year. The number of exits increased to 340 from 210 the previous year, the report said.
Mizuho has been building its business in India in the past five years, where its loan portfolio has shifted from mainly lending to state-backed companies to conglomerates including billionaire Mukesh Ambani’s Reliance Industries and the Adani Group.
The bank hired Piyush Agarwal, an ex-HSBC Holdings employee, in 2019 as head of corporate and institutional banking in India. It has also recruited several senior client coverage bankers to expand its customer base that includes JSW Group and Tata Group.
Earlier this year, the bank agreed to invest 12 billion rupees (S$191 million) in Indian financial services startup Kisetsu Saison Finance (India) to tap into the country’s high credit demand. BLOOMBERG
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