Daiwa Capital Market to scale up India operations
Daiwa Capital Markets aims to revive its fortunes in takeover advisory and brokerage by targeting the elusive Japanese savings that runs at more than $2 trillion.
MUMBAI: Daiwa Capital Markets, the Japanese securities firm that cut staff by a third in India to reduce costs, aims to revive its fortunes in takeover advisory and brokerage by targeting the elusive Japanese savings that runs at more than $2 trillion. India is a difficult market. There are complexity in taxation and regulations, lack of infrastructure and policy lapses is affecting Japanese investments,'' said India President and CEO Hiroaki Kato. There is no change in our mindset over the past two years. We have become more cost conscious and are focusing on sustainable growth,'' said Kato.
The Japanese firm that reduced its employee strength in the last two years from 90 to 60 in the past two years is now looking to cash in on the Indo-Japanese trade ties. We are looking to focus on cross border mergers and acquisitions and private equity deals. Once you invite foreign companies then you need to incentivise them. Logistics, simple taxation, infrastructure and political leadership is very important,'' said Kato. For instance the state of Gujarat. You need to have many states like Gujarat in India,'' he said.
Japanese FDI in India in 2011 was Rs 15,000 crore. Japan is looking to increase its trade and business ties with India. The two countries signed a Comprehensive Economic Partnership Agreementin 2011. Japan is already involved in many infrastructure projects in India, including the Western Dedicated Freight Corridor, which runs through the Delhi-Mumbai Industrial Corridor. Bilateral trade in 2011 was estimated to be $15 billion with Prime Minister Manmohan Singh and Japanese Prime Minister Yoshihiko Noda setting a target of $25 billion by 2014 during a visit to New Delhi by the latter in December.
We are seeing a very strong pipeline of M&A and private equity deals in the Auto, IT, Infrastructure, Insurance and pharmaceutical sectors. The mindset of Japanese companies is changing. Japanese now let local managements to run companies. In many ways Japanese and Indian corporates share similar like family values, running companies based on consensus and they are highly employee oriented,'' he said.
Japanese companies have experience in China. They have set establishment in many countries like Vietnam and Myanmar. India is not the first place,'' said Kato.
Recently, Japan's Mitsui Sumitomo Insurance Co. Ltd announced its plans to purchase a 26% stake in Max New York Life Insurance Co., a joint venture between Max India Ltd and US-based New York Life Insurance Co., for Rs2,731 crore in an all-cash transaction.