MUMBAI: Nimesh Kampani, the merchant banker to the mighty, has decided to stop being the rainmaker.
The man who took TCS and Bharti public, helped the government raise $2.4 billion by part selling crown jewel ONGC, got Ratan Tata, Kumar Birla and US giant AT&T into a room to stitch up a mega telecom alliance besides helping Mukesh Ambani demerge Reliance post the split with brother Anil before negotiating a deal between drinks major Diageo and Vijay Mallya, is stepping down as the chairman and MD of JM Financial on September 30th, 43 years after setting up shop and almost a decade after branching out on his own following a split with Wall Street partner Morgan Stanley. The company on Tuesday said Kampani’s son Vishal, currently the head of the firm’s institutional securities business, will take charge of all the businesses as its MD. Kampani Senior will pursue social work, JM said.
“I believe that it is important for businesses to implement a proper succession plan and I am committed to follow the same. I would, at this juncture in my life, like to spend more time and efforts on socially relevant activities.,” the elder Kampani, who is turning 70 this year, was quoted as saying.
His retirement will formally mark the exit of a generation of old school investment bankers known for their old world courtesy, humility, trust, a sharp mind and street smartness. With peers like Hemendra Kothari of DSP Merrill Lynch, Vallabh Bhansali of Enam, Nimesh bhai, as he is popularly known, was part of a tribe of dealmakers who had unfettered access to India Inc’s promoters and were their closest confidantes on all matters business and sometimes beyond the balance sheet. But Kothari decided to focus on tiger conservation after stepping down from the chairmanship of DSP Merrill Lynch in 2009. Enam was sold to Axis Bank and Bhansali is now more focussed on his family office. Uday Kotak, sometimes considered part of this tribe, of course has gone on to script a sepectacular sucess story with Kotak Mahindra Bank.
“Most of them had the same stock broking background but they changed the face of investment banking in India before Wall Street banks began their dominance. When the Indian equity cult was created in the 90s these three were the stalwarts,” said Bharat Doshi, former Mahindra Group CFO, a junior of Nimesh Kampani in both school and college. “Like his cricket, even off the field, he always played with a straight bat.”
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Bankers say there were two schools of investment banking – one process driven and institutionalised deal making, a path always followed by Kothari. Kampani was never part of such a stream. “It was all trust based personal rapport with top business houses that helped him to close the deals.” said a banker, who worked with Kampani in his early days.
According to Rajeev Gupta, managing director at Arpwood Capital, Kampani had a knack of handling challenging negotiations. “We worked together in ICICI Bank and ICICI Ltd merger in 2001. Contrary to the public belief, it was a hard negotiation as both the parties needed the biggest pie of shares. Nimesh Bhai really played a major role in convincing both sides to make the deal happen,” Gupta said.
It is this personal involvement, the ability to listen and then suggest solutions that helped him broker the biggest peace settlement in India’s corporate history. Together with ICICI Bank’s KV Kamath, Kampani helped the warring Ambani brothers split their business empire.
“A highly competent finance professional, always friendly and charming and always helpful,” said Rahul Bajaj, chairman of Bajaj Auto. “I enjoyed a very hearty relation with him, across several decades,” Bajaj said. Kampani advised the Bajaj family to demerge Bajaj Auto and carve out the financial services piece in 2007 under Sanjiv Bajaj.
Today investment banking is far more institutional in nature. The role of the house banker has changed. He is no longer a cult figurehead. Nor is he exclusive to any company. But even then industry colleagues are in awe of Kampani’s ability to be a market maker in his own right who never distanced himself from his tribe. “Amenable, approachable and always smiling and standing tall is how I will remember him,” says a CEO of a large global investment bank on condition of anonymity as he is not allowed to talk about competition. “Throughout, Nimesh Kampani has had a community appeal. Unlike Kothari or Bhansali he did not sell out. JM Financial still remains very much his. But for being the face he has also faced the music.”
In 2009 Kampani was forced into temporary exile in Dubai after the state government of Andhra Pradesh attempted to arrest him in a case involving Nagarjuna Finance Ltd, a non-banking finance company that defaulted on its public deposits seven years earlier. The then Rajasekhara Reddy regime, used Kampani’s temporary association with that company as an independent director in the mid 90’s as a ruse to corner him. Kampani’s real crime, say those in the know, is that he had financed Ramoji Rao of the Eenadu Group. Media czar Rao and the former CM were said to be bitter rivals.
After close to 2 years overseas, Kampani Senior returned but stepped back from daily operations. In his absence his doughty son Vishal (38) took charge, steadied the tumultuous ship, braving many comabtive rivals. In fact he has revved up JM’s deal making prowess, topping Bloomberg’s list of merger and acquisition (M&A) activity in India last calendar year and taking second place by the size of deals advised in rankings complied by Dealogic.
“During our merger with Birlas, Nimesh had already projected Vishal as his successor. It was a complex deal, between two families and we really had long negotiations. It was Vishal, who spearheaded this deal for us,” remembers Kishore Biyani, CEO of Future Group. Biyani believes during a principal to principal negotiation, a firm like JM is still relevant. “Foreign banks have greater global connectivity, scale and larger balance sheets but in situations like these, you need that trust and human continuity,” he said.
Even a blue blooded multi- national giant like Diageo and a pugnacious negotiator like Vijay Mallya would agree to such hypothesis or else they wouldn’t have relied on Nimesh Kampani to get their deal done.