Further to the story published by FinanceAsia on Friday, it transpires that India has been hit hard by Nomura's announcement that it is reducing its headcount by about 50 people in Asia ex-Japan. Of the 26-strong investment banking team in India, the Japanese bank will let go of nine people.
The bankers who are leaving include some of the most senior staff Nomura had on the ground in India, corroborating once again that the current rounds of headcount reductions, across firms, are intended to reduce numbers as well as costs.
Some of the people who are being let go are bankers Lehman Brothers had hired to kick-start its India investment banking business, including Surojit Shome, Prashant Purker and Ashok Mittal.
Lehman hired career Citibanker Surojit Shome in November 2006 as managing director and head of investment banking for India, based in Mumbai. At the time some found Shome a surprising choice as he was not a career investment banker -- his last position at Citi was as head of the bank's corporate banking franchise for India and the sub-continent.
In May 2007, Shome poached Prashant Purker from ICICI Bank, where he was head of global principal investments and trading, to become managing director and head of global finance for India. Purker was overseeing Lehman's client-based risk solutions group, which incorporated both debt and equities. Just three months later Ashok Mittal joined as a managing director and coverage banker, also reporting to Shome. Mittal moved across from HSBC, where he was a director in investment banking.
In January this year, following the integration of the Lehman business, Nomura announced that Vikas Sharma had been appointed country head for India in place of Tarun Jotwani. In December Jotwani had taken on a new role as the global head of fixed income for Nomura Securities, based in Tokyo. Back in Mumbai, Sharma also played the role of head of investment banking and Shome became deputy-head.
In addition to the three MDs, the bank has let go of two vice-presidents and four associates in India.
"Nomura had the second-largest investment banking team on the street in India after the Lehman takeover, following DSP Merrill Lynch," says a specialist. "It was only to be expected they would downsize."
India may also have been hit hard because investment banking fees have shrunk dramatically in the country. Capital market issuance has slowed to a trickle as markets are volatile and issuers have yet to make their peace with dramatically reduced valuations. Cross-border outbound mergers and acquisitions activity, which characterised 2006 and 2007, is severely reduced as acquirers find it difficult to secure financing for deals.
"Nomura's decision to bring their team down to a more manageable level is not surprising given the short- to medium-term outlook for investment banking in India," adds the specalist.