Mizuho Eyes Avendus Deal as it Deepens Investment Banking Presence in India

Context and Drivers

Japan’s megabanks—including Mizuho—have shifted aggressively toward India to capture higher returns in an economy growing above 6% annually—outperforming Japan’s domestic market. India’s expanding corporates, IPO pipeline, and rising demand for structured finance have made it an attractive destination. Regulatory innovation and liberalization (e.g., for foreign ownership) remain mixed but are being closely watched. [8][1]

Recent Strategic Moves by Mizuho in India

• Capital Infusion: In November 2023, Mizuho infused ~₹4,100 crore (~US$500 million) into its India branches. This raised its single-party lending limit from ₹1,100 crore to ₹2,000 crore and group exposure from ₹1,400 crore to ₹2,400 crore. This improved the bank’s risk-taking capacity and underpins its strategy to engage with larger, more complex transactions. [4]
• Stake in Credit Saison India: In early 2024, Mizuho acquired a 15% equity stake in Credit Saison India for Rs 1,200 crore. At that time, Credit Saison India had over 1.2 million active loans with a loan book exceeding Rs 10,000 crore. The entity had been break-even from FY2020 and was growing in both wholesale and retail/fintech partnerships. [2][4]
• Leadership Hiring: In August 2025, Devendra Sharma (formerly head of India Corporate Banking at Mashreqbank) was appointed as co-head of corporate banking in India for Mizuho. Based in Mumbai, he will oversee western India. This strengthens execution capability in key financial hubs. [1]
• Avendus Acquisition Talks: Mizuho is negotiating acquisition of majority stake (63%) in Avendus from KKR, possibly raising its total stake to ~70% by including minority investor shares. The deal would value Avendus at ~$800 million including debt. However, as of September 2025, talks are stalled due to valuation differences and KKR’s exit terms. [5][6]

Strategic Implications

• Higher Revenue Potential: Enhanced capital and ability to underwrite larger deals mean higher revenues from corporate clients, M&A advisory, structured finance. In India’s fast-evolving financial markets, fee pools—especially in IPOs and equity capital markets—are expanding. Mizuho’s plans to replicate its advisory-led model (e.g., via Greenhill in the U.S.) could provide leverage. [7][3]
• Capability Alignment: Mizuho emphasizes wholesale banking and corporate finance over retail expansion in India. This fits its track record and addresses regulatory and competitive headwinds around foreign banks offering retail. [4][3]
• Risk Exposure and Entry Barriers: Foreign ownership limits, regulatory scrutiny, valuation gaps (as in Avendus), and competition from domestic and other foreign banks (including other Japanese megabanks) will be critical constraints. Cultural, compliance, and integration risks in acquisitions are also nontrivial. [6][8]
• Competitive Dynamics: SMFG’s investment in Yes Bank and MUFG’s moves into NBFCs indicate a broader shift. Mizuho must act decisively to capture market share in investment banking, where first movers in equity underwriting, cross‐border M&A will benefit. [8][3]

Open Questions

1. Will the Avendus acquisition complete—and at what valuation? The gap with KKR around fair price and exit structures remains a sticking point. [6]
2. How will Mizuho scale up its deal advisory and ECM underwriting capabilities independently or via acquisitions beyond Avendus? What is the roadmap for bolstering its securities arm in India?
3. To what extent will regulatory changes (FEMA, foreign bank holding limits, capital rules) accelerate or slow Mizuho’s ambitions? Monitoring policy post‐2025 will be crucial.
4. How will macro factors—interest rates, currency volatility, global economic conditions—impact Indian deal flows, and thus Mizuho’s return profile?
5. What is the role of sustainability and ESG in Mizuho’s India investment banking strategy? Considering global trends, will Mizuho aim to lead in green finance, ESG underwriting, or similar spaces in India?