peHub Second Opinion

In the spirit of still wishing I was on vacation, a few links related to my travel destination:

***Not all Wall Street jobs are disappearing into thin air. According to the New York Times, many of them are heading to India, in a move execs call “high-value outsourcing” or “knowledge process outsourcing.”

The story goes: “In addition to moving some lower-level banking and research positions to support bankers and analysts in New York and London, firms are shipping some of their top bankers from those cities to faster-growing developing markets to handle clients there.”

***India’s Economic Times reported that first time funds in the country are having a hard time raising capital. Well they are here, too, the difference being that many more of the country’s firms are first-timers. The amount raised by first time funds in India so far this year–$275 million—seems unlikely to get within reaching distance of last year’s $3.6 billion total. Nervous LPs are seeking firms with established track records, the story reports.

***Indian airline SpiceJet has received a cash infusion of $100 million from turnaround firm WL Ross & Co and Goldman Sachs. It’s the company’s third round of funding, which totals almost $250 million. Right now the Indian airline industry is due for a shakeout, with too many players serving the market. Read about all the moving parts and potential M&A deals in this summary article, posted last month on FT.com.  And not that it’s useful, but I felt like adding that while I was in the country, I took a SpiceJet flight that was severely underbooked.

***Tesco is entering India and plans to grow via partnerships, not mergers.

***Lastly, a personal anecdote. I asked an M&A professional over there if Indian takeover targets were lowering their pricing expectations to suit the current environment (since the consensus seems to be that targets in the US and Europe have not). He said quite the contrary. “In recent years, Indian companies have gained a very strong sense of what they’re worth,” he said. In a recent acquisition, a European company offered a minority stake in its target to an Indian company. But the Indian company’s response was, “Actually, we’ll bid on the business ourselves, and you can take the minority stake.” Long story short, sellers are just as stubborn there as they are here.