Equirus Group Financial Services, which manages Equirus Capital, a mid-sized, full-service investment firm, is looking to expand its services to blockchain start-ups in addition to cryptocurrency companies. The investment company is raising funds for a blockchain company. In a conversation with FE.com’s Ritarshi Banerjee, Ajit Deshmukh, Managing Director and Co-Head of Investment Banking, Equirus explains how a differentiated strategy has helped its growth. (Edited excerpts)

According to various reports, Equirus had closed about five capital market transactions worth Rs 42 billion in 45 days. How do you plan to continue your growth in FY23?

In FY22, the company achieved 150% growth. Much of the growth was based on factors such as increased recruitments, initial public offerings (IPOs), transactions, among others. Investments increased in all segments, from early stages to mature markets, including mergers and acquisitions. So Equirus’ growth is probably in line with the industry standard, maybe a bit better. I believe that we act as mirrors of the financial markets. As we grow, the entire industry grows at a similar rate. This further allows investment bankers to grow and deliver transactions on time. The investment climate was positive and confidence was high in all sectors and in other sectors. This is the first time we see business in sectors such as infrastructure, technology and IT, with one focused on assets and the other on IPN and services. We also saw action across all sectors, including chemicals and pharmaceuticals. The current challenge in our industry is the continued hiring of people.

How is Equirus’ strategy different from other investment firms and what worked in your favour?

If you look at our size and shape, we’re probably the only full-service investment firm that provides advisory services on mergers and acquisitions, private equity, desktop syndication, among others. We also have a brokerage segment that provides services to institutions such as the Bombay Stock Exchange and the National Stock Exchange, and we have enterprise content management. We are probably one of the few companies to have a 360 degree view of the market. If you look at the boutique companies they stick to consulting which makes their view of the public market narrow, if you look at the larger companies they only serve larger groups and customers which makes us probably the only full-service investment bank. We remain focused on customers, data goals and have received great reviews.

How do you view emerging sectors such as blockchain, cryptocurrency and non-fungible tokens (NFTs)? Are you planning to enter this sector?

As investment bankers, we look at every attractive space and cryptocurrency is one of those areas. We are doing a few cryptocurrency transactions right now, and we even have a mandate from a blockchain-based company outside of India to raise funds. These sectors have witnessed a lot of action.

As the private equity sector recorded a compound annual growth of US$47.6 billion in 2020, how has this contributed to India’s current economic recovery?

As private equity provides the level of venture capital required for people to start and grow businesses, it also generates jobs. It certainly has a compound effect of about four to five times for every dollar or rupee invested, in terms of total employment. When we didn’t have a lot of equity instruments, someone’s ability to start a business without capital was limited. With capital now available, the fundraising process is easier and this has changed the landscape. So there is no debate about private equity as a concept. Equity investments for growing companies have had cumulative effects on the general economy.

In terms of volatility, how challenging is the current Indian market?

From the perspective of investment banks and brokers, volatility is a bit good because it uses the rolling of stable markets. In reality, I don’t think the markets are stable right now because the world is focusing on other events. Yes, markets are uncertain. When I made my first trade on the stock exchange, settlement took 15 days and now it’s faster. Everything changed. I think we need to dispel the confusion between volatility and trading speed.

Technology being such a big topic, what kind of investments do you expect?

IT will remain an M&A vertical in India. Indian IT companies will acquire a high base and new technologies will see a lot of investment rather than acquisition. Sectors like healthcare and life sciences will see a lot of action, and the fintech industry will have a more money-driven situation.

How do you see FY23 for Equirus and what will be the main areas of focus in India?

We would like to repeat our performance from last year but our business is unpredictable. I think infrastructure will continue to have a lot of action with technology, especially in the areas of blockchain, cryptocurrency, among others.

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