Mizuho’s $700 Million Acquisition of Avendus and Increasing Interest of Japanese Firms in Indian Financial Services Space

Mizuho Financial Group is set to acquire Avendus Capital from KKR for $700 million. KKR will be selling its entire 60% stake in Avendus to Mizuho. One of the founders of Avendus, Ranu Vohra, will also be selling his stake and exiting the company. After the acquisition is complete, Mizuho will be holding 70% stake in Avendus.

Avendus Is an Indian Investment Bank

Avendus Capital is an Indian investment bank. It was founded in 1999. Avendus and its subsidiaries are currently present in investment banking, wealth management, capital markets, wholesale financing etc. The company has offices in 10 Indian cities. It also has offices in USA and Singapore. In the nine months to December 2024, the company posted net profit of Rs 170 crore on revenue of Rs 1,035 crore. Its net profit margin in the period stood at 16.43%. In 2015, KKR had bought its stake in Avendus for around Rs 950 crore.

Besides Mizuho, Carlyle Group was also in the fray to acquire Avendus. Rothschild & Co acted as the advisor to the sell-side in the deal.

Japanese Firms Showing Interest in Indian Financial Services Space

Mizuho Financial Group is a Japanese financial services company. It is headquartered in Chiyodo City in Tokyo in Japan. Before Mizuho, another Japanese firm, SMBC, acquired 20% stake in Yes bank. Japanese firms seem to be interested in tapping the potential that financial services space in India offers.

Indian banking regulator, RBI has also indicated that it will be relaxing the regulations that are currently there for foreign financial services firms acquiring strategic stakes in Indian banks and financial services companies. It is now giving approvals on a case-to-case basis. It allowed SMBC to acquire a stake above 15% in Yes Bank. 15% is the current upper limit for foreign firms, that are strategic investors, for acquiring stakes in Indian banks.

Getting stake in Avendus will enable Mizuho to take advantage of India’s IPO market and mergers & acquisitions market too. India’s financial services space is currently among the more regulated ones in the world. But there is expectation that these financial regulations will ease significantly in the coming years.

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