Japanese giant Mizuho to acquire majority stake in India's Avendus from KKR

Mizuho Securities, a unit of Mizuho Financial Group, is poised to acquire a majority stake in Avendus, an Indian investment bank, from KKR's affiliate Redpoint Investments. This acquisition will make Avendus a subsidiary under Mizuho Financial Group's umbrella, further demonstrating the increasing interest of Japanese financial institutions in India's expanding economy.

Avendus co-founder and executive vice chairman, Ranu Vohra, will also sell his stake as part of the deal. He will remain in his current role until the acquisition is finalized, pending standard regulatory approvals.

Reports indicate that the valuation of Avendus Capital is approximately Rs 5,900 crore. Mizuho Financial Group and Avendus initially agreed to the acquisition terms roughly six months prior.

The purchase, potentially costing Mizuho Securities up to 81 billion yen ($523 million), underscores the growing trend of Japanese financial firms investing in India, attracted by the country's rapid economic growth and contrasting with Japan's aging population.

Mizuho Securities will acquire between 61.6% and 78.3% of Avendus, solidifying its position as a consolidated subsidiary.

Avendus will maintain its brand identity and operational independence, with founders Gaurav Deepak and Kaushal Aggarwal, along with the senior leadership team, continuing to lead the firm. The acquisition provides Avendus access to Mizuho's extensive network and global reach.

Mizuho Financial Group, a major global financial institution, serves millions of retail clients and a significant portion of listed companies in Japan. The group is actively expanding its international presence, offering a comprehensive suite of corporate and investment banking services worldwide.

Gaurav Deepak, Co-founder and CEO of Avendus Group, stated that Mizuho shares Avendus' values and vision for the future of financial services. He anticipates that the partnership will facilitate innovative capital solutions within the Indian market and strengthen financial ties between India and Japan.

Mizuho's chief executive, Masahiro Kihara, mentioned increasing inquiries from banking clients about expanding into India. He added that the acquisition would enhance Mizuho's cross-regional capabilities, particularly in conjunction with Greenhill, a US mergers and acquisitions advisor acquired by Mizuho in 2023.

Yoshiro Hamamoto, president and CEO of Mizuho Securities, highlighted Avendus' strong market position in India. He believes that integrating Avendus into Mizuho's M&A platform across Asia-Pacific, the Americas, and EMEA will enable the group to offer clients a broader range of solutions, leveraging Mizuho's global client base and financial resources. He emphasized the commitment to close collaboration with Avendus' leadership.

Kaushal Aggarwal, co-founder of Avendus Group, emphasized that the partnership represents a shared vision for the future of financial services in India, extending beyond just capital investment. He anticipates that Avendus and Mizuho will collaborate to deliver enhanced capabilities and value to clients, capitalizing on India's ongoing economic transformation to achieve significant growth and innovation both domestically and internationally.

In related news, Mitsubishi UFJ Financial Group is reportedly nearing a deal to acquire a minority stake in Shriram Finance, further illustrating the growing interest of foreign banks in establishing a presence in India. Sumitomo Mitsui Financial Group previously acquired a stake in Yes Bank earlier this year.