homemarket Newsstocks NewsTMT, financial services, infrastructure seeing most amount of deal activity: JPMorgan's Kaustubh Kulkarni

TMT, financial services, infrastructure seeing most amount of deal activity: JPMorgan's Kaustubh Kulkarni

Merger and acquisition (M&A) is driven by distress is the word coming out from the i-Bankers. From the sidelines of the JP Morgan Investor Conference, CNBC-TV18’s Nisha Poddar caught up with Kaustubh Kulkarni, head of investment banking at JPMorgan and asked him about the trends emerging on the deal street.

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By Nisha Poddar  Sept 19, 2019 9:44:21 AM IST (Updated)

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Kaustubh Kulkarni, head of investment banking at JPMorgan, spoke to CNBC-TV18 about the emerging trends on Dalal Street.

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“The market is asking very interesting and demanding questions of the companies. What the market is also asking the companies is to reposition, transform, change their business and it is also asking the companies to look at a complete solution rather than partial solutions. We are seeing this theme substantially in the financial services ecosystem, we are also seeing the similar theme into the delivery ecosystem and also for that matter in the fast-moving consumer goods (FMCG) ecosystem,” Kulkarni said on the sidelines of JP Morgan Investor Conference.
“Bluechips are well-owned, historically the institutional ownership in those companies has always been high and there is also a very well defined use of proceeds for blue-chips whenever they are looking to raise primary capital or even the secondary capital. So a bluechip in our view, irrespective of generally how the market is, will always be able to find the right investors who will be interested because those are very well-run companies. So we generally have no apprehensions or concerns vis-à-vis raising capital for bluechip companies,” said Kulkarni.
Talking about the private equity investors, Kulkarni said, “Enormous maturity and understanding need to be there whenever you are dealing with private equity investor as a company. So fundamentally if there is a concern or apprehension on the trust deficit, it is very hard to get private equity capital in those companies today. Private equity also has meaningfully changed their expectations or rather some private equity investors have meaningfully changed their expectations and they only want to focus on the larger transactions where there is a clear control or path to control available and then they will spend their time and bandwidth in evaluating those situations. So it is good because where companies are looking to find that kind of solutions, there is a clear set of private equity investors who will spend all of their time and ultimately find the solution."
“On the M&A side, I would say TMT (technology, media and telecom) as a sector will remain substantially active. Financial services and many other subparts of financial services which include banks, insurance, asset management, health insurance all of those are very relevant and active for both companies as well as for investors,” he said.
 

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