Bank of America Merrill Lynch or BofAML has beaten Citibank and Morgan Stanley in executing deals for the past 11 months of the year in India. Although plagued by lower fees and a weak deal volume, BofAML was able to complete 21% of deals valued at USD 7.96 billion. One of these transactions was the acquisition by British liquor maker Diageo of Vijay Mallya's United Spirits. Another deal was that of the 24% stake purchase of Etihad Airways in Jet Airways, the largest carrier in India.
BofAML Managing Director Asit Bhatia told The Economic Times, "We have identified a set of key clients and are trying to focus only on them. We have missed out on a couple of deals as it did not fit into the core of our strategy." It took BofAML about three years to make their operations seamless that it could finally sell products across the board to each key client.
Citibank came in second, with USD 7.43 billion in deals while in third place is Morgan Stanley which was able to close deals worth USD 7.2 billion. UBS was in fourth place with USD 6.3 billion in deals while Credit Suisse was in fifth place with USD 4.16 billion.
Bankers told The Economic Times that the ability to finance a deal is important in India inasmuch as local regulations do not permit domestic lenders to fund mergers and acquisitions. A managing director of a global investment bank said, "Today, though the client values the right advice, there is enough emphasis laid on how the financing is tied up for the acquisition. That is where big banks like ours win over others." Citibank, Barclays, HSBC and Deutsche also give financing to clients from their coffers.
Increasing competition and lower fees have propelled some investment banks to turn to servicing midcap firms.
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