Churn among Indian investment banks

Saurabh Sonthalia, Keshav Sanghi and Alagappan Murugappan, senior investment bankers at BoA Merrill, Citi and ICICI Securities, respectively, bank their bonuses and jump ship.
Alagappan Murugappan
Alagappan Murugappan

The first quarter of the year is when investment bankers get paid their hard-earned bonuses as reward for the previous calendar year’s performance. And, once that milestone has been reached, announcements start doing the rounds about who is going where.

In India this year, a number of senior bankers have decided to try their luck in a different industry or organisation, in some cases leaving behind a gap at the firm they left.

Saurabh Sonthalia, who was head of global capital markets for Bank of America Merrill Lynch, has handed in his papers and is on three months of gardening leave. He is rumoured to be heading for private equity.

Sonthalia is a veteran at Merrill Lynch in India and has spent much of his 20-year career at the firm. In 2006, he quit DSP Merrill Lynch Investment Managers, the asset management arm of Merrill Lynch in India, where he had been working for five years, to join AIG’s India asset management business. Sonthalia, who was then executive vice-president charged with heading strategy and business development at DSP, joined AIG India as chief executive officer. However, in 2009, Merrill Lynch, which had by then been taken over by Bank of America, lured Sonthalia back on board as head of global capital markets. In this role he was responsible for both the debt and equity capital markets business at BoA Merrill.

A source close to the situation said that BoA Merrill is unlikely to appoint anyone to replace Sonthalia as the bank has a strong bench of senior resources across both equity and debt. Debasish Purohit currently heads equity capital markets for BoA Merrill and is a director. Both debt and equity capital markets are now well integrated into the Asia-Pacific set up, added the source, making the role Sonthalia was hired to fill less important.

BoA Merrill and Sonthalia had no comment on the development.

Meanwhile, at Citi, Keshav Sanghi who headed equities for India has resigned after just over a year with the US bank. Sources say he is moving to Goldman Sachs to head the secondary market equities business for India and will join in June after serving his gardening leave.

Sanghi joined Citi in January last year as head of sales and deputy head of equities for India, primarily to build relationships with investor clients. He rounded out a wave of eight new hires Citi had made since 2009 as it sought to bolster its India equity franchise. However, just weeks after he joined, Sanghi’s boss Nikhil Nagle unexpectedly quit to pursue interests outside banking and Sanghi was promoted to head of equities.

He joined Citi from Reliance Equities International, a firm set up by Anil Ambani to complement his group’s domestic financial services firm, Reliance Capital. Sanghi spent 18 months at Reliance Equities, where he was CEO. He had also earlier worked with Deutsche Bank.

Citi confirmed that Sanghi has resigned and that Richard Macfarlane has been promoted to head the Indian equities business. Macfarlane had been heading execution services in India for the past 18 months, a newly created role that saw him take on responsibility for the equity and equity derivatives sales trading and trading platforms. He joined Citi from HSBC’s private bank in Singapore and had earlier worked at UBS.

Goldman Sachs had no comment.

Rounding out the troika Alagappan Murugappan, who was in charge of the institutional business of ICICI Securities, comprising both investment banking and institutional broking, has also made a move to private equity. Murugappan is joining UTI Asset Management Company to run its infrastructure fund and spearhead the initiatives of India’s largest mutual fund in alternative assets.

UTI’s infrastructure fund seeks to invest $15 million to $20 million in infrastructure-focused businesses, said a source close to the situation.

This is Murugappan’s second stab at private equity and is also his second stint at ICICI Securities, where he was once head of investment banking. He left that post to join private equity firm Actis (erstwhile CDC) as an investment principal with the responsibility for leading and coordinating fundraising activities relating to South Asia and deal-generation in India. In 2006, he left Actis and joined start-up private equity firm Deeva Capital where he was one of three founding partners. In 2007, ICICI Securities lured Murugappan back as head of equities. He started his career with Cazenove in London and then had a long innings at Cazenove in India, heading its operations there.

ICICI Securities also announced a change of heads recently. Madhabi Puri-Buch, who was CEO, is taking a sabbatical. Effective May 1, Anup Bagchi, who was an executive director on the board of the Indian investment bank, will take over as CEO.

“Post Murugappan’s departure, Anup Bagchi, CEO designate will be leading a strong and competent team of professionals in the investment banking and institutional broking business,” said a spokesperson for ICICI Securities. Murugappan, who has already started at UTI AMC, had no comment.

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