• Skip to content
  • Skip to navigation

Grant Thornton uses cookies to monitor the performance of this website and improve user experience

To find out more about cookies, what they are and how we use them, please see our privacy notice, which also provides information on how to delete cookies from your hard drive.

Global site
  • Global site
  • Algeria
  • Botswana
  • Cameroon
  • Egypt
  • Ethiopia
  • Gabon
  • Guinea
  • Kenya
  • Libya
  • Malawi
  • Mauritius
  • Morocco
  • Nigeria
  • Namibia
  • Senegal
  • South Africa
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe
  • Anguilla
  • Antigua
  • Argentina
  • Aruba, Bonaire, Curacao and St. Maarten
  • Bahamas
  • Barbados
  • Bolivia
  • Brazil
  • British Virgin Islands
  • Canada LLP
  • Canada RCGT
  • Cayman Islands
  • Chile
  • Colombia
  • Costa Rica
  • Dominica
  • Ecuador
  • El Salvador
  • Grenada
  • Guatemala
  • Honduras
  • Mexico
  • Montserrat
  • Nicaragua
  • Panama
  • Paraguay
  • Peru
  • Puerto Rico
  • St Kitts
  • St Lucia
  • St Vincent and the Grenadines
  • Trinidad & Tobago
  • United States
  • Uruguay
  • Venezuela
  • Turks & Caicos
  • Afghanistan
  • Australia
  • Bangladesh
  • Cambodia
  • China
  • Hong Kong
  • India
  • Indonesia
  • Japan
  • Korea
  • Malaysia
  • Mongolia
  • Myanmar
  • New Zealand
  • Pakistan
  • Philippines
  • Singapore
  • Taiwan
  • Thailand
  • Vietnam
  • Albania
  • Armenia
  • Austria
  • Azerbaijan
  • Belarus
  • Belgium
  • Bosnia and Herzegovina
  • Bulgaria
  • Channel Islands
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Gibraltar
  • Greece
  • Hungary
  • Iceland
  • Ireland
  • Isle of Man
  • Israel
  • Italy - Bernoni
  • Italy - Ria
  • Kazakhstan
  • Kosovo
  • Kyrgyzstan
  • Latvia
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Macedonia
  • Malta
  • Moldova
  • Monaco
  • Netherlands
  • Northern Ireland
  • Norway
  • Poland
  • Portugal
  • Romania
  • Russia
  • Serbia
  • Slovak Republic
  • Slovenia
  • Spain
  • Sweden
  • Switzerland
  • Tajikistan
  • Turkey
  • Ukraine
  • UK
  • Uzbekistan
  • Bahrain
  • Egypt
  • Jordan
  • Kuwait
  • Oman
  • Qatar
  • Saudi Arabia
  • United Arab Emirates
  • Yemen
  • Lebanon
Grant Thorton Logo

Grant Thornton logo

Contact us
  • Insights
  • Industries
  • Services
  • Events
  • Budget 2021
  • Careers
  • L&D Academy
  • Media
  • Country corridors
  • Consumer, Retail & E-commerce
  • Healthcare and Life Sciences
  • Automotive and Manufacturing
  • Media, Technology and Entertainment
  • Not for profit
  • Real Estate and Construction
Healthcare and Life Sciences Home
Our publications BillionFit: Technology redesigning healthcare
Our report, BillionFit: Technology redesigning healthcare, navigates through key trends in disruptive technologies in healthcare, with a focus on India. This paper captures India’s Healthcare and Fitness scenario from a technology perspective, while providing some insight into the recent developments globally.
Automotive and Manufacturing Home
Thought Leadership Auto Bytes January 2020
This edition of Auto Bytes focuses on what will shape the future of the sector.
Media, Technology and Entertainment Home
Publication The Digital Accelerate – New regulatory framework implementation guide
The publication summarises the transition process mandated by TRAI for digital television services, and how consumers can select their subscriptions.
Real Estate and Construction Home
Report Improving transparency in secondary real estate market
Holistic pan-India assessment on various parameters in the secondary market & direct impact of a regularised secondary market on stakeholders.
  1. Grant Thornton Bharat
  2. Press releases
  3. 2014
  4. Domestic i-banks increase focus on e-commerce

Domestic i-banks increase focus on e-commerce

08 Dec 2014
  • Domestic i-banks increase focus on e-commerce

Local investment banks (i-banks) are setting up dedicated teams to pitch for assignments from the country’s e-commerce companies in a bid to capture a slice of the frenzied deal activity in the booming industry where companies such as Flipkart and Snapdeal are raising billions of dollars in new funds.

Over the past six months, Kotak Mahindra Capital Co. Ltd, Motilal Oswal Financial Services Ltd, Equirus Capital Pvt. Ltd, Axis Capital Ltd and Edelweiss Financial Services Ltd have zeroed in on e-commerce as an area they would focus on. Some have put up new teams to target business from the sector. Some domestic investment banks including Avendus Capital have already managed some transactions including Quikr, TaxiForSure and BookMyShow.

In the past 10 months, investors have put in $8.5 billion across 381 deals in the country and e-commerce has contributed more than one-third of the total deal value at $2.96 billion, according to data compiled by consulting firm EY. The money has been spread across 55 deals, even though a disproportionate amount has been invested in three firms—online retailers Flipkart and Snapdeal, and taxi services firm Ola. The relatively small size of most of these transactions means lower fees for the investment banks.

“At Kotak, we have brought in internal organizational focus on the online space and have created a focused group which would look at addressing the wider digital domain across companies in the media, entertainment, financial services, logistics, cloud computing, advertising and e-commerce sector,” said Chetan Savla, senior executive director and head of corporate advisory group at Kotak Investment Banking.

While capital-raising dominates activity in the e-commerce space for now, investment banks are going beyond that and also seeking mandates for capital market listings and mergers and acquisitions, said bankers.

“We are running a few initial public offerings and mergers and acquisitions deals in the Internet and digital space,” Savla said, adding that they are evaluating whether to hire a dedicated resource to overlook the vertical.

Domestic investment banks are setting up specialized teams and are focusing on the e-commerce sector. Others, such as Motilal Oswal and Edelweiss, have already set up specialized e-commerce teams. Motilal Oswal now has a four-member team to focus on this sector, while Edelweiss hired Ashish Tripathi as its national head for technology, media and telecommunications from EY.

“Going forward, this sector will become big. A lot of these players who are turning profitable and are making money are looking at hitting capital markets to raise further growth capital,” said Ashutosh Maheshwari, chief executive officer at Motilal Oswal Investment Advisors Pvt. Ltd.

Tripathi of Edelweiss expects the e-commerce segment to see significant capital-raising and deal activity.

“We have hired specialists in the sector as we are seeing significant deal activity and cross-border interest in this space,” said Tripathi.

Even as the volume of deals is high, the smaller ticket size of the deals means that the fee generated by an investment banks per deal is lower than in traditional sectors.

Across the five investment banks Mint spoke to, most of the bankers indicated that fees range from 1.5% to 4%, depending on the size of the deal.

“We don’t expect the fee structures to bring is as much as other deals do, but we propose to manage it by working with these firms through their lifecycle and raise their two-three rounds of capital,” said Vineet Toshniwal, managing director at Equirus Capital. Earlier this year, Equirus Capital hired Nitin Agarwal as a director to overlook this vertical.

“Our team is focusing on firms which have a profitable business model, which have gross margins. We are restricting ourselves from mandates where companies are loss-making,” Toshniwal added.

“We are doing meaningful deals and the fees meet our threshold limits as these sectors have become sizeable and deals are yielding money,” Savla added.

Avendus executives were not available for comment.

Online retail in India was an approximately $2 billion market in 2013 and is likely to grow at a compounded annual growth rate of 63% to $7.2 billion by 2016, according to a Motilal Oswal report released in November. Apart from e-commerce, segments such as logistics, warehousing, coupons and payment gateways are also expected to do well, the report added.

“As investments in this sector increase, deal flows have gone up significantly and most of the investment banks are trying to expand their business. People are trying to do good deals and build credibility,” said Harish H.V., a partner at Grant Thornton India Llp.

“We will definitely see many of the companies go public, for those who are able to post profits will look to list in the Indian markets, rest will opt for overseas market listings,” Harish said.

The article appeared in Mint. The article can be found here.

  • Follow us on Facebook
  • Follow us on LinkedIn
  • Follow us on Twitter
  • Follow us on YouTube
CONNECTclose
  • Locations
  • Contact us
  • Global reach
ABOUTclose
  • About us
  • Careers
  • Press
  • Corporate Social Responsibility
LEGALclose
  • Privacy
  • Disclaimer
  • Site map

© 2021 Grant Thornton Bharat LLP – All rights reserved.

    • EN
    • Sign in
    • Contact us
    Sign in with LinkedIn Close
    Sign in with LinkedIn to save articles to your bookmarks.
    Privacy policy