Kothari may sell his 10% holding
The ripples created by Merrill Lynch sale to Bank of America has put on stake- the residual shareholding of 10% held by DSP Merrill Lynch chairman Hemendra Kothari in the Indian arm.
By Krishna Gopalan, ET Bureau |
MUMBAI: The ripples created by the sale of Merrill Lynch to Bank of America could extend well beyond the possible restructuring of the financial services firm���s operations in India. For at stake is also the residual shareholding of 10% held by DSP Merrill Lynch chairman Hemendra Kothari in the Indian arm.
Sources close to Mr Kothari, one of the most visible faces of investment banking in India, told ET that he was likely to exit from this investment.
In late 2005, Mr Kothari sold his 50% holding to Merrill Lynch for $500 mn. Following that transaction, he was left with a 10% stake. The aim then was to delist the DSP Merrill Lynch stock.
Now it remains unclear as to how much Mr Kothari���s stake will be worth though investment banking sources say it does make sense for him to exit since there is very little he can gain by holding on to his 10% stake.
Mr Kothari was travelling and could not be reached for his comments. A DSP Merrill Lynch spokesperson declined to
comment.
Like Mr Kothari, his contemporary and another top investment banker, JM Financial Group chairman Nimesh Kampani too exited from a venture with his foreign partner, Morgan Stanley. That was in early 2007. Since then, Mr Kampani has moved on to set up a full-fledged financial powerhouse on his own without roping in a foreign partner.
If Mr Kothari chooses to exit from DSP Merrill Lynch, it will mark the end of a significant phase in investment banking in the country.
Today DSP Merrill Lynch is a formidable player in the sphere of investment banking, corporate advisory and debt markets. It is a well-known name in the capital markets and runs a full-fledged research team apart from having a presence in wealth management.
For DSP Merrill Lynch, the near term will be challenging with an integration with Bank of America on the cards. Issues such as who would head the venture in India and the name of the new entity are all still unclear. A lot of clarity could emerge in the new few months.
Sources close to Mr Kothari, one of the most visible faces of investment banking in India, told ET that he was likely to exit from this investment.
In late 2005, Mr Kothari sold his 50% holding to Merrill Lynch for $500 mn. Following that transaction, he was left with a 10% stake. The aim then was to delist the DSP Merrill Lynch stock.
Now it remains unclear as to how much Mr Kothari���s stake will be worth though investment banking sources say it does make sense for him to exit since there is very little he can gain by holding on to his 10% stake.
Mr Kothari was travelling and could not be reached for his comments. A DSP Merrill Lynch spokesperson declined to
comment.
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A possible move to sell the residual holding could mark Mr Kothari���s complete exit from DSP Merrill Lynch. It was in the mid-80s that DSP Financial Consultants and Merrill Lynch started working together and a formal joint venture was unveiled in 1995. Mr Kothari remained in charge of the venture till he decided to sell a large part of his holding in December 2005, which eventually left him with a 10% stake. Like Mr Kothari, his contemporary and another top investment banker, JM Financial Group chairman Nimesh Kampani too exited from a venture with his foreign partner, Morgan Stanley. That was in early 2007. Since then, Mr Kampani has moved on to set up a full-fledged financial powerhouse on his own without roping in a foreign partner.
If Mr Kothari chooses to exit from DSP Merrill Lynch, it will mark the end of a significant phase in investment banking in the country.
Today DSP Merrill Lynch is a formidable player in the sphere of investment banking, corporate advisory and debt markets. It is a well-known name in the capital markets and runs a full-fledged research team apart from having a presence in wealth management.
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Mr Kothari, who comes from a family of stock brokers, has been closely involved in a host of complex and large transactions like Satyam Infoway���s decision to acquire India World, an internet start up in 1999, Holcim���s entry into India and key capital offerings like those of DLF and Reliance Petroleum. For DSP Merrill Lynch, the near term will be challenging with an integration with Bank of America on the cards. Issues such as who would head the venture in India and the name of the new entity are all still unclear. A lot of clarity could emerge in the new few months.
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