Mizuho Financial Group’s Major Acquisition of Avendus Capital

In a significant move, Japanese financial giant Mizuho Financial Group is poised to acquire KKR-backed Avendus Capital in a deal that values the Indian investment bank at Rs 6,000 crore ($700 million). The Economic Times, which first disclosed this news, noted that the deal follows several months of discussions and represents Mizuho’s largest commitment in India.

This agreement will see KKR exit its 60% stake, alongside early investors and co-founder Ranu Vohra. The remaining founders, Kaushal Aggarwal and Gaurav Deepak, will continue to manage operations, albeit with Mizuho retaining veto rights. Post-acquisition, Mizuho is expected to hold up to 70% of Avendus.

Overview of Avendus Capital

Founded in 1999, Avendus is engaged in various financial services, including investment banking, credit solutions, institutional equities, wealth management, and asset management. The firm’s acquisition of Spark in 2022 enhanced its presence in capital markets. For the nine months ending December 2024, Avendus reported revenues of Rs 1,035 crore and a net profit of Rs 170 crore.

KKR’s Role and Returns

KKR, which invested between Rs 950 crore and Rs 1,000 crore in Avendus in 2015, is anticipated to achieve a 3.5x return on this investment. Competing bidders such as Carlyle and Nomura were in the mix, but Mizuho stood out as the frontrunner due to better strategic alignment and potential for cross-border synergies.

Mizuho’s Expansion in India

Recently, SMBC made an investment in Yes Bank, while Mizuho took a 15% stake in Kisetsu Saison Finance. With five branches operating in India, Mizuho has already injected $500 million into its Indian operations and appointed Sanjay Nayar, KKR’s former head for India, as an advisor.