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In an effort to diversify its portfolio and deepen its relationships with clients, JPMorgan Chase & Co. (NYSE:), the leading arranger of equity sales in India this year, is planning to finance startups in the country. The bank is targeting companies that are pioneers in their sectors, developing new products or services, as reported by Bloomberg.
The New York-based bank has expressed interest in companies with a large consumer orientation both within India and internationally. “We want to be there first with those companies,” stated Kaustubh Kulkarni, the senior country officer for India during an interview in Mumbai. This city also hosts the bank’s new offices which opened last month.
Despite recent market fluctuations, the startup ecosystem in India remains robust, with the fintech industry being the third-highest funded after the US and UK, according to data intelligence firm Tracxn Technologies Ltd. This healthy environment has attracted both international and local investors such as Y Combinator, Peak XV Partners, and TPG. Emerging sectors like artificial intelligence, green hydrogen, and clean energy have also garnered considerable attention from venture firms and strategic investors.
Over the past four or five years, JPMorgan has been focusing on building deeper and more expansive relationships with clients. This approach seems to be fruitful as the bank now ranks first for stock sales this year, a significant jump from its sixth-place position in 2022. Among its notable deals was the initial public offering by Mankind Pharma Ltd., one of the largest IPOs of the year.
Kulkarni emphasized that JPMorgan’s engagement with startups reflects its efforts to have broad-based relationships with mid-sized and large corporate clients that go beyond investment banking. “We do not want to just do transaction-based engagement but want to understand how we can offer products and services which are relevant to the global market and not offer only investment-banking services,” Kulkarni, who also serves as the bank’s vice chair for Asia-Pacific, said to Bloomberg.
JPMorgan, with a legacy in India that spans over a century through its predecessor banks, is one of the largest foreign lenders in the country. It employs over 50,000 people in cities including Mumbai, Hyderabad, and Bengaluru.
Looking forward, sectors such as business services outsourcing, manufacturing, energy transition and green energy are expected to witness inflows of tens of billions of dollars in the coming years. JPMorgan is keen on building relationships in these areas. Kulkarni believes that outsourcing from the US and Europe will continue to drive employment growth in urban areas.
However, contrary to some of its competitors like HSBC Holdings Plc (LON:), JPMorgan has no plans to start a domestic wealth management business in India in the foreseeable future. “Our business and our entire focus absolutely is wholesale,” Kulkarni said. “There is a lot to be done in the wholesale banking business, and we are just scratching the surface.”
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