The stars of India’s financial markets

Global bank CEOs, looking at India afresh, see a broad, deep equity market largely accessible to foreign institutional investors (FIIs). Global investors are rushing in. The market capitalization of Mumbai’s booming Sensex bourse, which has risen by nearly 500% over the past five years, passed the $1 trillion mark on May 28. Total FII inflow in June alone was $5.85 billion, according to the Securities and Exchange Board of India – a national record.

Deals are also being struck that make India’s vibrant markets the centre of world attention. The two largest domestic IPOs in Indian history took place over the past 12 months, as did three of the four largest follow-on offerings, and four of the largest corporate debt sales on record. Record cross-border transactions, notably the $12.98 billion acquisition of Anglo-Dutch steel company Corus by Indian rival Tata Steel, and Vodafone’s $12.9 billion push into India’s crowded mobile telecoms market, has made M&A the hottest market across India.

Such blockbuster deal activity sucks in attention and spews out record fees. According to data provider Thomson Financial, total India investment banking fees in the year to August 8 were $875 million, up 56% from a year ago. Fees generated by a vibrant equity capital markets business alone added $430 million to the pockets of investment banks over the period, up 100% over the previous year. What’s more, India’s capital markets are an open playing field for all investment banks – running counter to China, which retains a moratorium on all new securities ventures.

This has created a glaring need for highly experienced bankers well versed in negotiating India’s regulatory minefield, while building relationships with the country’s leading industrialists and rising entrepreneurs.

So while the country’s financial markets remain largely dominated by investment bankers born and bred in India, the face of India’s capital markets is now changing. More senior foreign investment bankers are putting down roots in India, such as Brooks Entwistle, the young chief executive of Goldman Sachs India, and Patricia McLaughlin, who was appointed vice-chairman of India investment banking at DSP Merrill Lynch in July 2006.

Some of India’s most seasoned overseas-based bankers are also beginning to return home, notably Tarun Jotwani, who was lured back to Mumbai as Lehman Brothers’ new India chief. Other respected members of the country’s financial diaspora prefer to remain overseas, helping, like Anshu Jain, head of global markets at Deutsche Bank, or Jasjit "Jesse" Bhattal, chief executive of Lehman Brothers Asia, to swing deals in favour of their respective institution in large part by their personal reputation and Indian heritage.

To that end, Euromoney has put together profiles of 10 of the most powerful individuals at work in India. The list excludes some well-known names, and includes many of the country’s fast-rising stars. But everyone on this list can be considered a rainmaker in their own way – individuals who make their banks, private equity firms and investment vehicles the ones to watch – in the world’s most exciting emerging market.

L Brooks Entwistle
Managing director and CEO, Goldman Sachs India

L Brooks Entwistle is a rare successful foreigner in India’s generally homespun financial community. Just 39 years old, the head of Goldman Sachs India oversees a burgeoning prop trading and private equity business, an increasingly successful advisory service, and an expanding service centre in southern Bangalore employing 850 people.

Perhaps only Goldman could get away with putting such a visibly western face in charge of a growing Indian team so soon after selling its stake in former partner Kotak Mahindra Bank.

Certainly it’s one of the few institutions in India where brand matters more than banker.

That said, Entwistle has helped to create an efficient and profitable new cog in Goldman’s universal profit-making machine.

A highly respected rival at another Wall Street firm says Brooks is "a smart guy, very capable, and very typically Goldman Sachs – I think they have a factory turning them out somewhere". The Harvard-educated Entwistle has been at the bank since graduating 18 years ago, during which time he has served as a district supervisor in northern Cambodia for the UN, coordinating humanitarian assistance, and as a member of the Council of Foreign Relations.

"He has a slight disadvantage in not being Indian," the banker says, but adds that any negativity is more than compensated for by Goldman’s brand. "They’re investing a lot of time training industry bankers who know India’s corporations and business leaders inside out, and Brooks is in charge of all of that. It’s already paying off for them. People already want to work with them – some of my clients are in awe of them. It hurts to say, and clients won’t say that directly because they would look pretty stupid, but you can see it in their behaviour. They want to be worthy of Goldman."

Goldman’s ability to leverage its balance sheet to help clients, and its record on equity sales, mergers and acquisitions, is already paying off. The US institution won plum roles this year co-arranging the sale of $5.2 billion-worth of shares by ICICI Bank and UTI Bank, now Axis Bank, and in February took advantage of a long-standing relationship with Hutchison Whampoa to advise the Hong Kong conglomerate on the $12.9 billion sale of a 67% stake in its Indian telcoms business to Vodafone. Expect more to come from Brooks & Co.