Accounting firms Haribhakti, DB Desai join forces to take on 'Big Four'

MUMBAI: Two of India’s biggest accounting firms Haribhakti & Co and DB Desai & Co have joined forces to create a company with 50 partners and 1,250-strong workforce, signalling the first wave of domestic consolidation to challenge the dominance of Big Four multinational accountants.


Kolkata-based DB Desai & Co has signed an agreement to buy a large stake in Haribhakti group started by VV Haribhakti in a tiny office at Hamam Street located adjacent to Mumbai’s Dalal Street way back in 1951.

Under the merger terms, DB Desai will pown big stakes in two Haribhakti group companies, and the merged entity will be called Haribhakti Desai Consultants (India). Dilip Desai, the 51-year old founder promoter of Desai & Co, will join as managing partner of flagship audit firm Haribhakti & Co.

The financial terms of the deal are not disclosed. “This is the birth of a domestic professional services firm with a global outlook. This will increase our size and depth,” said Shailesh Haribhakti, chairman of Haribhakti & Co.

The alliance will boost the combined entity’s presence in 10 cities and bolster revenues to Rs200 crore. While Desai & Co has its network of clients in the East and North, Haribhakti group is an established name in the West and South. “Dilip Desai is known for taxation and Haribhakti group is known for audit and consultancy.

The merger will help them become stronger by offering these services under one roof,” said ML Bhakta, senior partner of law firm Kanga & Co. The alliance is seen as an attempt to break into the ranks of four biggest multinational audit firms — PwC, Deloitte, KPMG and Ernst & Young. While these four firms collectively handle accounting transactions worth Rs5,000 crore, the domestic accounting industry still has a size of only Rs1,000 crore.

“We are aiming to scale up our manpower 10 times in the next five years. This means that we will have 13,000 people by 2018. We also aim to create a global network,” said Dilip Desai. The domestic consolidation is a reflection of a worldwide trend. Two top accounting firms BDO and PKF have recently merged to create a firm with 3,500 people.

The Big Four are the four biggest global networks in accountancy and professional services. This group was once known as “Big Eight” and was reduced to the “Big Six” and then “Big Five” by a series of mergers. The Big Five became Big Four after the demise of Arthur Andersen in 2002. “We need credible alternatives to Big Four. We would like to have depth of experience, history of performance and size.