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Published on: April 25, 2024, 10:57 a.m.
Dharmesh and the art of deal making
  • Dharmesh: playing with a straight bat; Pix: Sanjay Borade

By Daksesh Parikh. Executive Editor, Business India

Life holds many twists and turns, some for the better, some for the worse

Dharmesh Anil Mehta, the current MD and CEO of DAM Capital Advisors Private Limited, a leading investment bank, has found himself benefiting from life’s unexpected twists and turns. As a student at HR College of Commerce and Economics, Dharmesh found himself contemplating his future during the summer vacations, as many students do after completing their graduation examinations. However, becoming a stockbroker was not a part of his envisioned path. Despite attending Hindi Vidhya Bhavan School in Mumbai, which boasted several alumni who became icons in their respective fields, such as Uday Kotak, the late Rakesh Jhunjhunwala, Vallabh Bhansali, Nirmal, and Manish Chokhani, Dharmesh did not initially consider a career in the stock market.

A chance encounter with a family friend introduced Dharmesh to the broking business. In the 90s, when Dharmesh began his journey, the Bombay Stock Exchange (BSE) was the only exchange in Mumbai. “I entered the broking business by accident, not by choice,” reminisces Dharmesh. “If not for broking, I would have pursued a completely different profession.” With his father involved in the heavy machinery business, Dharmesh had limited exposure to shares and the stock markets.

During this period, the National Stock Exchange (NSE) had not yet been established, and screen trading was not in practice. All transactions were conducted through open outcry, and daily transactions were documented on a small A4-sized sheet known as the ‘bhav copy’, which was sold for an official rate of 50 paisa each. Latecomers willing to pay could obtain a copy for Rs10.

The Sensex was under 1,000 in the mid-90s, during the period Dharmesh started going into the ring. Being a fast learner, Dharmesh soon learnt the intricacies of broking. However, he decided to take a different path and started doing business for institutions. At that time, there were two major institutions, LIC and UTI, with general insurance and other insurance companies coming in at a distant third. Apart from that, inefficiencies in the market also presented a lot of arbitrage opportunities between Mumbai and other stock exchanges such as Mumbai-Calcutta, Mumbai-Ahmedabad, Mumbai-Delhi, Mumbai-Kanpur, Mumbai-Chennai, and so on.

This was known as the line business and was quite prevalent among large broking houses, who either had their own offices in other exchanges or had deep relations with brokers in other exchanges. There were no mobiles, and business had to be done either through trunk calls or hotlines for big brokers. Inter-market communication was quite difficult, and fax lines came in later.

Boom and bust of 1992

The relationships that Dharmesh built during that period have only strengthened over time. After a couple of years, Dharmesh worked with KG Vora and helped in building up the institutional business for the broking house. He witnessed the boom and bust of 1992 and the securities scam, wrongly attributed to Harshad Mehta alone. It was during this time that relations were deepened, as institutions preferred to do transactions with known entities they could trust.

The turning point in Dharmesh’s life came when he joined Enam and helped them to restart the institutional business. “We had a series of meetings before onboarding him to our team,” says Vallabh Bhansali. “What struck me was his confidence and entrepreneurial drive. He had the humility to learn when he was wrong and the persuasion to follow through a deal until it was executed,” Vallabh adds.

“His persuasion and alignment of interest with Enam’s values really stood him in good stead and helped him grow fast.” Enam always stood by their clients long after the transaction was done, with the motto of putting clients’ interests first. Dharmesh headed the equity markets at Enam. Bhansali and Nimesh Shah were relatively new investment bankers who, along with establishedbankers Hemendra Kothari of DSP Merrill Lynch and Nimesh Kampani, made up the big four in the financial sector.

  • Negi: Dharmesh is a hardcore execution person

    Negi: Dharmesh is a hardcore execution person

“It was his confidence and his energetic entrepreneurial drive which really impressed me,” says Manish Chokhani, one of the four partners at Enam and its MD when it merged into Axis Bank. “Such was his confidence in his ability to get results that he agreed to join us at a small fixed salary and earn the bulk by way of bonuses. He was a rare salesperson who could sense the pulse of each client and had the rare ability to calibrate his communication with each client based on what would work for them. He had the ability to call up 20 fund managers due to his personal equations even then,” he said.

“He has an instinct and passion for deals, something which one had seen, for example, in Hemendra Kothari in his earlier years. He was our sword arm, a finisher like Virat Kohli, who got us across the line on all our deals" remarks Chokhani.

It was during his period at Enam that Dharmesh built and, to his credit, nurtured relationships with promoters and CEOs of companies. Those relationships, trust, and decades of relentless hard work are helping him to attract a strong deal flow at DAM Capital,” Chokhani points out.

“Recently, in DAM Capital, Dharmesh acted as a sole advisor for the sale of Ravalgaon’s sugar, confectionary IP to Reliance Consumer Industries. This deal was completed in March 2024. Earlier, DAM Capital also acted as one of the advisors to Nirma for the acquisition of 75 per cent stake in Glenmark Lifesciences in a deal valued at Rs5,650 crore.”

Dharmesh went to Axis Bank post the merger of Enam with Axis and built up Axis Capital, the investment bank which won several accolades under him. He was instrumental in making Axis Capital the number one investment bank and the top bank in Equity Capital Markets (ECM). Enam was also largely focused on raising funds for equities.

An avid cricketer himself, Dharmesh was known to play with a straight bat. “Unlike some other investment bankers who talk glibly and try and sell securities which would not be in the interest of the fund, Dharmesh did his homework well and took care to sell appropriate securities to buyers,” says A Balasubramanian, MD and CEO, Aditya Birla Sunlife Mutual Fund. "If I were to describe one quality which endeared one to Dharmesh, it was honesty,” says Bala.

The second turning point in Dharmesh’s life came when he left Axis Capital and ventured out on his own in November 2018. He, along with a few investors, made a bid for IDFC Securities. IDFC had earlier bought SSKI, a broking outfit, and brought it into its fold in 2006.

At that time, IDFC was in the midst of a merger with First Bank and was in the process of divesting all divisions that did not align with its banking focus. However, the deal fell through due to IDFC holding out for a higher valuation. Despite several unsuccessful bidders for IDFC Securities, none were successful, leading to a significant exodus of staff from the company. Eventually, Dharmesh acquired IDFC at an undisclosed price, providing him with a pre-established platform to expand his equity offerings. Notably, Dharmesh chose not to terminate any staff, reflecting his commitment to maintaining a stable workforce.

  • Unlike some other investment bankers who talk glibly and try and sell securities which would not be in the interest of the fund, Dharmesh did his homework well and took care to sell appropriate securities to buyers

    A Balasubramanian, MD and CEO, Aditya Birla Sunlife Mutual Fund

Expanding services

“It was not our practice to hire and fire, even at Enam,” stated Vallabh Bhansali’s protégé, underscoring their consistent approach to personnel management. Subsequently, DAM Capital emerged as a formidable presence in the market. Transitioning into a comprehensive investment bank firm, DAM established its own research house and expanded its services to include institutional broking and M&A advisory. Since the takeover three years ago, DAM Capital has completed 20 M&A/Private Equity deals and raised capital through 25 IPOs, 15 QIPs, and private placements, as well as OFS deals.

In the recently concluded fiscal year FY24, DAM executed 9 IPOs across various sectors, the largest being JSW Infra with an issue size of Rs2,800 crore. Other notable IPOs include Entreo Healthcare, Capital Small Finance Bank, and Yatra. Additionally, DAM facilitated 9 QIPs totalling Rs11,500 crore.

DAM boasts strong relationships with top corporates such as Reliance Industries, JSW, Tube Investments and Vedanta. It also maintains a positive rapport with the Shapoorji Pallonji group, providing fundraising services and advisory support for the sale of its renewable assets and data centre resources to Reliance. In FY24, DAM secured the mandate for Afcons, another successful company under the Shapoorji Pallonji umbrella.

“Selling comes naturally to Dharmesh; not just selling ideas but also building relations. He leads from the front,” says Jateen Doshi, MD Institutional Sales. Jateen worked with him at Enam before moving to IDFC Securities. “He comes across as a warm person and treats his team as part of his extended family.” The workflow is efficient, and Dharmesh often comes to his office on Saturdays.

“He is quite fast in getting things done. In the MapmyIndia issue, it was completed within weeks of signing, and the RHP was filed,” says Kamraj Singh Negi, MD Mergers and Acquisitions, Equity Capital Markets. He adds: “Dharmesh is a hardcore execution person and often travels with promoters. He does not sleep much and gets involved as much as possible, including the nitty-gritty.” Kamraj has joined the IDFC Securities team.

In the book-running process for new issues, being on the left side of the book-running managers is considered prestigious. Ajay Garg, who previously worked at DSP ML but then started his own investment bank, EquirusCapital, highlights that being the left-side BRLM (Book Running Lead Managers) means that the success of an IPO is often their primary responsibility.

“DAM and Equirus have successfully disrupted the dominance of traditional equity capital markets (ECM) firms. Over the past 3 years, we have individually executed numerous IPOs, resulting in many success stories, even in the small-cap sector,” Ajay remarks. “Dharmesh has seamlessly transitioned his success from the AXIS platform to DAM, earning the rare distinction of establishing two thriving ECM practices.”

Success breeds success. With youth on his side, Dharmesh can effortlessly leverage his achievementsto establish a comprehensive investment bank. DAM’s ambition is to emerge as the premier destination for all capital needs.

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