Qatar’s Qinvest to buy 25% in Ambit for Rs 250 crore [The Economic Times, India]

Feb. 19--MUMBAI, India -- Ashok Wadhwa-promoted Ambit Corporate Finance has brought in as strategic partner Qatar's largest investment bank -- Qinvest -- which will pick a 25 percent stake in the company. Qinvest will also invest $25 million in Ambit's equity fund, besides helping it mobilise funds under a $150-million Shariah-compliant fund.

The Qatar-based investment bank will invest Rs 250 crore into Ambit Corporate Finance -- the group's holding-cum-operating company -- valuing the business at around Rs 1,000 crore. This is one of the largest deals in a boutique investment bank in recent years.

Qinvest will also have the first right to contribute fresh funds if the Indian group looks at raising fresh capital. Both partners have also agreed to list the company in a couple of years.

Qatar Islamic Bank hold a 35 percent stake in Qinvest, while the remaining stake is held by institutions and HNIs from Gulf countries. Mr Wadhwa, the group CEO of Ambit, currently owns 98 percent stake in the company, while the remaining is with the employees. The company is known more for its M&A advisory business. Last year, the consolidated net profit of the firm was at Rs 22 crore.

The fresh money will be used by the Indian group to invest in proprietary trading and Ambit FinInvest, a newly-formed non-banking finance company (NBFC), among other things. Speaking to ET, Mr Wadhwa, group CEO of Ambit Holding said: "Qinvest has committed to invest $25 million in Ambit Frontier Fund and will also help in raising additional $100 million. We are also raising a Shariah-compliant fund, which will have a fund size of around $150 million."

Qinvest will become an anchor investor in Ambit Frontier Fund, which currently has a fund size of around $10 million. The Mauritius-based fund was launched last December and will invest in Indian equities. Qinvest's CEO Shahzad Shahbaz will join Ambit's board.

Mr Wadhwa added: "Around Rs 100 crore of the fresh capital will go into proprietary trading. Another Rs 50-75 crore will go into the NBFC. The rest of the money will go into strengthening the equities platform of the group."

At present, Ambit is involved in only medium-sized IPOs and rights issue as the group didn't have the distribution strength. The Qinvest deal is bigger than the 2008 deal where Dubai-based Eastgate Capital Group, the private equity arm of National Commercial Bank of Saudi Arabia, invested Rs 100 crore in Avendus Capital, another boutique firm.

"We think there is an opportunity for mid-tier local banks to become dominant regional banks. For this, we needed to access capital. It also allows us to move from being a boutique firm to a full-service firm. Due to the strategic relationship, we also get access to the distribution network of its investee companies, access to institutional holders and capital and become more visible in the market place. It would also help us in retention of people and setting a benchmark for ESOPs," said Mr Wadhwa.

The move also comes in at a time when Qatar is looking to invest around $2 billion in India. Gulf countries have been looking to increase their investments in this part of the world, especially in India and China. "Given the intentions of Qatar to invest in India, the relationship with Qinvest will allow us to network with their clients and investors and create new opportunities in India. It will also help Qinvest evaluate potential financing opportunities with Indian business houses, as they look at acquisitions locally and internationally," said Mr Wadhwa.

Last year, Qinvest had taken a strategic 47 percent stake in Panmure Gordon, a UK-listed brokerage firm, which is also a 100 percent owner of ThinkEquity that provides equity research, investment banking, institutional brokerage and private wealth management services in the US. Ambit will now be able to send their research reports to clients in UK and US.

"Ambit Research will now be distributed in US and UK. We would also have access to institutional investors, empanelled with Gordon and ThinkEquity, to distribute primary and secondary paper," he pointed.

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