In 2012, Manisha Girotra left Swiss financial services major UBS AG to join a new firm Moelis & Company as its CEO, India. Now five years with Moelis, which has revenues of about $700 million globally and employs 1,000 bankers from US to Australia and Japan, it has been a journey with “no regrets”.
Girotra, who began her investment banking career with ANZ Grindlays in London and now with more than 25 years of experience, is the person behind the nearly 15 acquisitions Moelis advised in India.
In a tete-a-tete with
Moelis & Co was set up by my ex-UBS boss, so there was a lot of comfort. In 2011-12, he decided to set up office in India and asked me to join, and here we are, five years later, no regrets. When we set up, the market was quieter, India was not doing much and it was a good time to set up the platform. It gave us a good first 12-18 months runway to establish the firm and brand, and today we are doing some of the largest deals and mid-cap deals. India is in a sweet spot today.
Has Moelis always been a boutique firm?
We don’t think of ourselves as a boutique firm, we think of ourselves as a global investment bank.
In India, there are a lot of stressed assets on sale. Is Moelis interested in advising buyers or sellers of stressed assets?
There is a lot of activity there. A lot of assets are of good quality and, I think, what people felt were the debt-levels were unsustainable and that’s why you don’t see high interest in the past. Now that the restructuring is happening, you see global players such as strategists and private equity players coming in. We are trying to get on the buy side of these opportunities.
Was this year one of the best years for IPOs?
Absolutely. The last five years, we saw dull equity markets in India and globally. In the last 12-18 months, India has been benefitting with the same liquidity pool that global markets are. Globally, market capital to GDP ratio is at an all-time high. So, this is nothing unique to India. What is unique to India is that some of the sectors such as consumer and financial services are disproportionately benefitting from this.
More importantly, a healthy trend is that five years ago the markets were dependent on FIIs. Buy things have changed now. A lot of money that used to find its way into gold, and real estate is now coming back to the domestic market in a structured way through mutual funds, etc. Since it’s coming from mutual funds, giving proper returns, this money will stay as sticky money. I think, that's what India lacked. It lacked foreign direct investment and it lacked domestic inflows to counter FII mood swings. Now that we have both of these, the currency will remain stable and markets more stable.
This year is also expected to be one of the best years for M&A. What is driving M&A in India?
One is just the domestic consolidation happening either through NCLT or SDR process or some company merging into another. The second big trend is private equity. Last year, private equity put $18 billion in India; this year it has already crossed $7-8 billion. Tech has seen quite a bit of strategic investments. The third, of course, was outbound. Outbound, it’s now become narrow and focused on sectors such as technology, consumer and pharmaceuticals. IT companies have to re-invent themselves and power companies have to look for more geographies.
Where does India stand from the global investors’ standpoint?
The interest in India remains high. Global investors see India as a long-term good-play. They say you are lucky as we have a good market, a stable government. Unlike three years ago, when no one wanted to talk about India, people feel positive about demonetisation, GST, RERA and Moody’s upgrade.