Singhi Advisors sees a goldmine in stressed assets in 2014

MUMBAI: Investment banker Singhi Advisors is keen on tapping distress asset sales this year as it expects cheaply valued but good assets coming up for mergers or outright takeovers after RBI call to banks to control bad loans that have hit an all-time high of 10.2 per cent.

"We are sitting on a good pipeline of deals in the making and our special focus this year will be distress asset M&As given the number of many stressed companies which will be ready for deals," Singhi Advisors Founder and Managing Director Mahesh Singhi told PTI.

Other focus areas in 2014 will be pharma, building materials and packaging sectors, he said, adding that Japanese and German firms expected to come tapping the domestic assets this year in a more aggressive way as they are flushed with cash.

He termed the year gone by as a good one as Singhi Advisors could close five deals even though for i-bankers overall it was a bad year with the deal size falling 11.5 per cent to US $ 31 billion.

Singhi said his firm, set up 25 years ago, completed five M&As in 2013, including two distress sales but good assets. It was the principal adviser for the sale of the high-pressure laminate business of Well Pack Papers & Containers to Formica (a part of Feltcher building, New Zealand) and aluminium extrusion business of Bhoruka to YKK of Japan, he said.

Its other deals included sale of Hydro S&S India's leading engineering plastics compounder arm to Kingfa of China, which is world's largest modified plastics maker; a strategic investment in agrochemical firm Anupam Rasayan and joint venture between Sunways and Rohto Pharmaceuticals of Japan, Singhi said.

Unlike big i-bankers, boutique i-bankers like Singhi, O3, Spark Capital, Mape Advisory, Veda Capital, Allergo Advisors and Equirius Capital among others focus on specialisation and taps small to mid-ticket deals, thus can weather a bad year like 2013.