Mizuho Financial Set to Acquire KKR-Backed Avendus Capital for India Expansion

Mizuho Financial Group Inc. is making its most recent wager on India's quickly growing financial services industry by purchasing a majority share in the investment bank Avendus Capital Pvt., which is backed by KKR & Co. The third-biggest bank in Japan announced on 17 December that a significant shareholder had agreed to buy 61.6% of the Mumbai-based company.

For a total purchase price of INR 4,700 crore ($516 million), it is requesting permission from other holders to raise that to 78.3%. The deal, which is expected to be Mizuho's biggest investment in India, reflects a larger effort by Japanese financial institutions to increase their footprint in the major economy with the highest rate of growth in the world. Mizuho is giving business and investment banking first priority, while some competitors are aiming for India's sizable consumer sector.

Why Mizuho Eyeing for Indian Market?               

The acquisition of Avendus strengthens Mizuho's position in India, which has emerged as a popular market for IPOs due to robust economic expansion and increased business activity. Established in 1999, Avendus is a prominent participant in the investment banking, wealth management, and asset management industries in India. It has provided advice on some of the biggest equity offerings and important deals in the nation.

According to a September Bloomberg News story, negotiations with Mizuho had previously stopped on valuation discrepancies. "India has been a missing piece, and the partnership with Avendus will fill that," Mizuho CEO Masahiro Kihara stated during a briefing, alluding to the global corporate and investment banking expansion of the Tokyo-based business.

Instead of starting from scratch, Mizuho has been trying to expand its worldwide consulting business by combining its financial sheet with local knowledge. In order to strengthen its merger advisory expertise in the Americas, it acquired US investment firm Greenhill & Co. in 2023.

Japanese Firms Now Focusing on India’s Financial Sector

According to a Bloomberg News story this week, Mitsubishi UFJ Financial Group Inc. is getting close to signing a deal to purchase a minority position in Indian non-bank lender Shriram Finance Ltd. In a historic agreement earlier this year, Sumitomo Mitsui Financial Group Inc. became Yes Bank Ltd's largest stakeholder in India.

Banks will have a chance to contribute as more Japanese businesses in other industries are anticipated to grow in the nation. Many Japanese businesses are thinking about joining the Indian market, according to Kihara, and having a solid partner with solid ties to local business owners will be very beneficial to us.