Paresh Sheth

Paresh ShethIndus1advantage

Investment banking solutionsMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesJoint ventures in emerging marketsAnd Actionables!

Paresh ShethOn Joint Venturesparesheth@yahoo.co.in / +919820608727indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint ventures

The next 20 Minutesor soMergers, Acquisitions,Alliances, Joint ventures,Collaborations, Start ups, Buy Outs.indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesCommon denominatorTimes Bank ; HDFC BankIndiaInfo / Seranova ;Just DialTopworth marketing P Ltd ; Sell off to HNI investorsAge Marketing ; Sell Off to Competition aboveICICI Bank ; ICICI Ltd / ICICI PFS / ICICI CapitalICICI Bank ;Bank of MaduraIDBI Bank ;United Western BankIDBI Bank ;IDBI LimitedIDBI Bank ; IDBI Fortis Federal bank Life InsurancePrincipal Financial Group ; PNB, Vijaya Bank 8000 Branch AllianceFirstRand Bank ;India Start UpHBS Swiss Bank ;Managing Indian Sub in to Investment Banking

Mergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesCaveat My thoughts are Mostly based on personal experiencesHence Biased

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesTake awayUnderstanding why JVs are importantPOA for Students & PractitionersSpotting JV opportunities

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesWhy are alliances / Joint ventures Imperative?indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesAll businesses are Marketing; and 2. InnovationBoth Require

Resources, Ideas and Markets.

ScarceEmerging MarketsPopulationEco GrowthEnvironmental change; dynamic environments; less predictableEnvironment complexity; large number of external factorsResource scarcity; Challengesindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint ventures8Solution to Scarcity

Solution is Sharing, Leveraging, Outsourcing and BorrowingStrategic AlliancesJoint VenturesMergers & AcquisitionsSolo??indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint ventures9SoIf Mergers, Acquisitions, Alliances and Joint Ventures are IMPERATIVE...What are we looking at?Are we in a sweet spot?Is there an emergence of unstoppable trends?What's the challenge?How do MNCs think and Plan?

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesUnstoppable trendsStrategy formulation & implementation is being impacted by 3 unstoppable trendsGlobalization, Technological advances, and Partneringthat feed and reinforce each other. Globalization means blurring, increasingly permeable national boundaries.Technological advances means industry convergence or blurring industry boundaries. Partnering (strategic alliances, international joint ventures, global networks) means blurring firm boundaries. National, industry, and firm boundaries are all becoming porous, and the unprecedented challenges and opportunities created by such porosity provide the broad context and the underlying importance of interorganizational networks to global strategy.

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint ventures11OpinionA recent report by World Bank Vice President Otaviano Canuto argues that developing countries will be engines of growth and could carry the world economy in the future, provided they have a clear strategy. If so, there may be enormous opportunities for companies to claim market leadership by helping developing countries to establish these growth strategies. A different role for business in development will certainly emerge. But what will be its parameters, objectives and responsibilities? What will be the key requirements for a new era and how can we create sustainable strategies?indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesTwo challenges emergeTwo challenges to business :1.The definition of strategies and partnerships that enhance sustainability of business and market development;2.The need to innovate to deliver profitable products and services in developing countries. ; LOW NEED TO INNOVATE

SOURCE DELOITTE MANUFACTURINGindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesSo what does a Typical MNC do?(to address the challenges)indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesHow do mncs target a country?Personal Experiences of Senior Managers Gut Feel or Anecdotal Advice / EvidenceCountry Portfolio Analysis & Risk AssessmentGDP & Per Capita IncomePopulation CompositionGrowth RatesPurchase Power Parity & Exchange ratesWorld Economic Forums Global Competitiveness IndexWorld Banks Governance IndicatorsTransparency Internationals Corruption ratingsWeight in Emerging Market Funds InvestmentsPolitical Forecast

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesComposite IndexBrazilRussiaIndiaChinaGrowth Competitiveness(world eco forum report)57705546Business Competitiveness(world eco forum)38613047Voice & Accountability(world bank report)58336010Composite Risk(100 is least risky)**70787276Weight in Emerging Market Index***SCB6.9%5.2%5.0%4.7%indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesWhat's wrong with composite index?COMPOSITE INDICES are useful; but only when they are used a basis of drawing up strategies when home base and target countries have comparable Institutional contextsFor example US and UK have similar Product, Capital and Labor Markets. They also have comparable network of skilled intermediaries and strong regulatory systems

Softer Infrastructure Issues are missing !!South Africa BEEMalaysia ; Government Pro Malay policyIts difficult to imagine a business in china without government supportFinancial Reporting in ChinaCorporate Governance issues in China and Russia Threat to Intellectual Property Rights (IPR)

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesEyes of an mncIf a MNC uses such a composite index to define the country

How do they finalize the entry strategy?

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesHow do mncs decide if M&A or JV or Alliance? Or go solo?indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesQuestions

How close are your strength and internal resources to those identified in the GAP?Resistance to internal development; towards fulfilment of the GAP?Difference in organizational model required to achieve strategy?Resources; availability? Inherent strengths? Organizational ability for scalability?Time, Money and Energy cost; estimated to resolve organizational conflict if any towards achieving strategy?Cost of outsourcing? Cost of Alliance?How deep an understanding is required?How integrated the strength / process / geography / activity; to future strategy?How important the customer / profitability / branding?How strategic an alliance is required?The need to possess certain abilities / competencies before you can profitability acquire certain other competencies / abilities / technologiesIn any alliance; the more the departments and people have to coordinate; the lesser the chances of success.How far does this alliance / JV take us? In our goals indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint ventures20Two more questionsHow tight an Embrace?Alliance Management Capacity?

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesAnswersAnswers to questions posed in the last pagewill give us a Solution !Alliance / Outsource / Joint Venture / Acquisition / SoloOther FactorsProduct / Price / Promotion / Place / Public / PoliticsThis will give us the final answer; to the kind of alliance we should strike; if at all.

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesWhat's wrong here?Even the Best of GAP ANALYSIS & COMPOSITE INDEX STUDY leaves out Institutional voids!In emerging economies; soft infrastructure which plays a critical role in execution of business models is missing ; These are Institutional Voids !

These institutional Voids are not shown in any gap analysis or any Composite Index.Institutional Voids hamper the implementation of Globalization Process.

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint ventures23Institutional voids- Skilled Market Research Firms to understand Customer Preferences - End to End Logistics Provider (Chinese Example) - Manpower & Search Firms - Lack of Specialized Intermediaries - Efficient Bankruptcy Processes - Financial reporting / GAAP etc - Capital Markets & VC funding - Debt Capital Markets - Stock Exchanges / SME Exchanges - IPR & Copyrights - In country Brand perception / Preference - Supplier Base & Logistics- Modes of Entry / Ownership - Civil Society & NGOs - Politics & Corruption- Trade Unions - Management talent education/english - Permissible modes of entry - Data base vendors - Accounting Firms - Product Rating Companies like JD Power - Reserved Products for SME / Indigenous - Contract Enforcing Mechanismindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint ventures24SoIf you look at issues with Composite index and Institutional Voids

The obvious answer ;Entering emerging markets without local support is a folly..

Alliances / JVs are in; Solo is definitely not worth the costs.indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesHaving said thatResearch suggests that multiple JVs fail. Even merged companies are demerged. Frankly; this is an entry strategy; which may last 5 to 15 years. Once the MNC company is set in India and has a foot hold. to remain together is another question!

Lets leave this for another dayRight now lets see if there is an action plan we can form to enable JVs / Alliances / M & As and act as a catalyst for MNC entry.

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesPart iiactionablesindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesSpotting opportunities**Value Chain Analysis and Multiple Other ways of defining GAPs.Indus1Advantage has a proprietary model to Identify GAPs.indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint ventures28Have a look at institutional voids again- Skilled Market Research Firms to understand Customer Preferences - End to End Logistics Provider (Chinese Example) - Manpower & Search Firms - Lack of Specialized Intermediaries - Efficient Bankruptcy Processes - Financial reporting / GAAP etc - Capital Markets & VC funding - Debt Capital Markets - Stock Exchanges / SME Exchanges - IPR & Copyrights - In country Brand perception / Preference - Supplier Base & Logistics- Modes of Entry / Ownership - Civil Society & NGOs - Politics & Corruption- Trade Unions - Management talent education/english - Permissible modes of entry - Data base vendors - Accounting Firms - Product Rating Companies like JD Power - Reserved Products for SME / Indigenous - Online Platforms- Contract Enforcing Mechanismindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesThese voids are with reference to Intermediary businesses like a consultancy, Investment bank and accounting form.29How to make the most of it?Institutional Voids or Value chain gaps

Opportunities for Investment Bankers and IntermediariesSure MNCs have Expertise, Credibility & Experience

Localities Advantage? Intermediaries are - People intensive; local culture & Language required - Information Sensitive requires local expertise to access scattered Info and data - Government Support; Few businesses prohibit Solo FDI / Entry indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesPage 14630Exampleof filling institutional voids!China Emerge Logistics8 lane highwaysbut transportation system underdevelopedMultiple TollsEmerge Logistics; takes foreign companies all the way through the delivery process.Filling import papers to customer collectibles.

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesToshiba

Toshiba; Strategic Alliances as a Key Element of StrategyTo develop strategic alliances with different partners for different technologies Because a single company can not dominate any technology or business by itselfindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesSpotting JV opportunitiesIdentify Gaps this is the opportunity.Spot Institutional Voids - this is where u make a compelling case for the Foreign corporate to come to India (if u solve them that is)Identify the right Indian partner who can nullify this void and you have the right recipe for a great Joint Venture.

indus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint ventures33Thank YouViews Expressed here are personalindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint venturesnotesEmerging markets = Argentina, Brazil, China, Czech Republic, India, Indonesia, Mexico, Poland, Russia, and South Koreaindus1advantageMergers, acquisitions, alliances, joint venturesindus1advantageMergers, acquisitions, alliances, joint ventures Paresh Sheth

Paresh runs an investment bank indus1advantage and specializes in cross border joint ventures and alliances. His clients include large industrial houses, multinational corporates and listed corporates. He works across multiple sectors including education, Info tech, energy, clean technology & green energy, banking, financial services, insurance, wealth management, construction, engineering, health care, water technology & infrastructure. Paresh also works as the dean at a leading management institute dedicated to Investment banking & Strategy.He is also an advisor to multiple companies including UB Engineering Ltd and P Mac Private Limited. Prior to this he was India CEO and Full time director for a Swiss bank Indian subsidiary and the Deputy CEO for another Swiss bank subsidiary in to Brokerage and wealth management. Paresh has the bandwidth to handle multi-billion dollar conglomerates, various family offices and SME/ MME clients as well; at the same time. He assist large companies involved in mergers, acquisitions, joint ventures, alliances, technology transfer and distribution tie ups He advises SME / MME on sales, innovation, alliances, growth and board formation. He also works with various single / multiple family offices and advises them on setting up new businesses. Paresh currently also works with leading wealth management and brokerage companies and capital market investors to design their strategies, enhance profitability and establish competitive sales and risk organisations. Paresh has played a pivotal role in setting up a MNC bank, an MNC Insurance company and a financial product distribution company amongst others as a project manager. An entrepreneur at heart; he set up his first company at the age of 21. He has subsequently worked for 20 years at various BFSI corporates including IDBI Bank, HDFC Sec, FirstRand Bank, Hinduja Bank Switzerland and ICICI bank in various capacities including CEO, board member and business head. He was the chairman for finance and membership for 3 years at CII YI Mumbai. He is one of the few professionals to have managed a team of 7500 executives and 5 million customers. He was frequently involved in strategic initiatives to align the retail and wealth banking activities with the changing times and the introduction of innovative products and services to a new customer base and different markets. He was also a part of business process reengineering at IDBI Bank and represented the retail banking unit in the BPR forum. Paresh championed the customer value management unit at IDBI Bank. Paresh has studied at IIM Calcutta and Mumbai University. He was a faculty for strategy at a leading management institute in Mumbai for 3 years and now is a regular lecturer at leading management schools including IIMs. He is a regular speaker at events on Entrepreneurship, Banking, Investment Banking and Strategic Management. He is currently authoring a book on wealth management. indus1advantageMergers, acquisitions, alliances, joint ventures Indus1Advantage is in the business of investment banking. While we are sector agnostic; the origination strategy revolves around cross border deals. We assist companies involved in mergers, acquisitions, joint ventures, alliances, technology transfer and distribution tie ups. And provide ancillary and advisory services. We also assist in raising capital.

As a boutique investment bank we specialise in scouting for, understanding and bringing global companies to India to setup base or form joint ventures / alliances with suitable Indian corporates. Family offices form a considerable part of our customer base. We help them invest in and build up new businesses. We also assist them in formation of trusts and companies overseas.

We also offer advisory services including sales, accounting, marketing, listing guidelines and board formation to SMEs / MMEs

Sectors where we have expertise and experience are education, Info tech, energy, clean technology & green energy, banking, financial services, insurance, wealth management, construction, engineering, health care, water technology & infrastructure.

We are well connected in the geographies of India, Germany, Italy, Switzerland, Kenya, Burundi, South Africa, Fiji and New Zealand. indus1advantageMergers, acquisitions, alliances, joint ventures