India Inc to grow with my stint in Merrill Lynch Intl: Kothari.

India Inc to grow with my stint in Merrill Lynch Intl: Kothari
Mumbai, Dec 11 (PTI) Hemendra Kothari, the man in the news for selling his majority stake in DSP Merrill Lynch to the US partner for approximately 500 million dollars, today said his induction in the Merrill Lynch International would help Indian corporates grow globally.
Kothari, who has been retained as Chairman of DSPML, in interview with PTI, said he had not yet made up his mind as to how to utilise the proceedings out of the deal.
"But the new investment would certainly not be in areas which could pose a challenge to the Indian investment bank," he said.
Kothari said the additional responsibility given to him as Vice-Chairman of Merrill Lynch International and member of Merrill Lynch Asia Pacific Executive Management Commmittee would help Indian companies grow larger at the international level.
"My voice would be heard for Indian companies (at global level) and it would be easier for our Indian businesses to grow bigger," said the man, who heads the investment bank that has advised major deals like Holcim's acquisition of Ambuja Cement for 810 million dollars and Scottish and New Castle's purchase of 38 per cent stake in United Breweries for 100 million dollars.
On his new investment plans using the money that he would get from selling his over 48 per cent stake in DSPML, he said, " Again, I am not going to invest the money in government securities." However, he hastened to add, "I wouldn't take any risk either".
"I am (also) in no mood to deposit the amount with the banks either," Kothari said.
Asked what prompted him to sell the stake after founding the company and entering into a joint venture agreement with global investment bank Merrill Lynch, he said individual could not be more important than an institution which was thriving with immense growth potential. "Merrill Lynch is in mood to expand in financial services in India. (Its) deep strength of capital can help expand business," Kothari said.
He, however, clarified that he did not mean to say that DSP Merrill Lynch was not well capitalised. "It has over 100 million dollars in shareholders money, comprising equity and reserves", he added.
The existing capital is sufficient to fund existing plans, but expansion may require more capital, he added.
However, he did not reveal the expansion plans, saying they are being prepared.

He also said there was a revenue-sharing angle to the whole transaction. "It does not give motivation to international bank that they would capture only 40 per cent and not 100 per cent in books." Then there were aspirations of employees and the requirement of addressing the need of clients better, Kothari added.
When asked whether he would also sell his majority stake in DSPML Fund Managers, a wholly-owned asset management subsidiary of DSPML, he hinted that it would never be so.
An asset managment company does not require such "huge" capital and whenever there is a need for expansion the two partners will infuse capital in the existing ratio, he said.
Kothari also said that the asset management company was more about "Indian knowledge". Kothari and associates own 60 per cent in DSPML Fund Managers.
Stating that he was not retiring now, Kothari said," the company (DSPML) will employ more people, even from overseas having specialisation in various fields on lines of our vision to grow manifold".
Global investment bank Merrill Lynch will buy additional 50 per cent stake in DSP Merrill Lynch for a consideration of 500 million dollars, which will raise its ownership in the Indian joint venture to 90 per cent.
The deal is expected to close in the first half of 2006 subject to various regulatory approvals, Merrill Lynch had said in a statement.
The US-based company will also make an open offer for traded shares of DSPML and start the process of delisting the company from BSE, the statement had said.
Majority of new purchase would come from the stake of Indian partner -- Hemendra Kothari and his affiliates.
Hemendra Kothari will continue as Chairman of DSP Merrill Lynch and will take on added responsibility as a Vice Chairman of Merrill Lynch International, besides a member of the Merrill Lynch Asia Pacific Executive Management Committee.
The name of Indian company will contine to remain DSP Merrill Lynch, according to the statement.