Rabo Fin recasts India ops, splits investment banking

MUMBAI: Eight years after it was set up, Rabo India Finance (RIF), the 100% subsidiary of Rabobank International, has gone in for a restructuring of its Indian operations.

The change comes in the wake of a host of exits of middle-to-senior level personnel from the non-banking financial company (NBFC), after which the company has recruited executives and beefed up its capital markets and investment banking teams. It is also looking at offering research while helping corporates to raise money from the American depositary receipts (ADR) and global depository receipts (GDR) markets.

As a part of its restructuring exercise, RIF has split its investment banking business into two verticals — capital markets for raising resources; and mergers and acquisitions and corporate advisory cell. Earlier, it had brought all commercial banking activities under one head.

The restructuring was kicked off in December ’05. RIF has taken in Kaushik Modak as executive director and head – capital markets. Mr Modak earlier headed debt capital markets in Bank of America. RIF has also added two directors to the capital markets team — Rahul Chander and Jayen Shah. The M&A cell will now be headed by Shefali Shah. She was earlier the head of the Indian operations of InSite Equity.

Previously, both these verticals were under Ashutosh Maheshvari, who left the NBFC to start the investment banking business in Motilal Oswal. According to Sanjiv Bhasin, MD & CEO, RIF, “We have restructured the team so that the
response time to clients becomes more efficient and the clients’ needs are served in a holistic manner. This would also help to improve the market penetration.”

RIF has also beefed up both the teams. Earlier the investment banking team had only around five people. Now this team will have 13 people — eight in the capital markets team and five in M&A.

Mr Bhasin added, “Our emphasis will be on the non-fund side and that’s why we are focusing on capital markets and M&A. Over the last two years, the non-fund income has grown to 10% of the total revenue. We are looking at increasing that to 40% of the total revenue.” The bank’s profit after tax as on March 31, ’06, was at Rs 52 crore as against Rs 23.7 crore as on March 31, ’05.

RIF is also looking at adding on research to its existing operations and targeting corporates which are looking at ADR and GDR. “We need to add research capability. We will need to have a capacity of five-six people for this. However, this is only on the drawing board,” says Mr Bhasin.

He added, “We have a distribution capability in the international markets. RIF will initially look at how this business develops before looking at the domestic IPO market. In the domestic market, it would, however, look at the option of either having alliances with domestic companies or setting up its own distribution network.”