Goldman Sachs – Opportunities in Emerging India

About Goldman Sachs

The Goldman Sachs Group, Inc. is a leading global financial services firm providing investment banking, securities and investment management services to a diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals in some 25 countries. The firm was founded in the year 1869, and is headquartered in New York. The firm maintains its offices across the world and have presence in cities like London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world. The firm engages in proprietary trading and private equity deals, and is a primary dealer in the United States Treasury security market.

In the year 2011, the firm generated net revenues of $36.793 billion with net earnings of $ 4.442 billion. It faced major challenges in the year 2010 and 2011 along with economic slowdown, it also faced SEC civil fraud lawsuit.

Goldman Sachs Structure

Goldman Sachs is primarily divided into three businesses units. Following are the business units in which the firm operates:

• Investment Banking,
• Trading and Principal Investments and
• Asset Management and Securities Services.

Investment banking Segment

The IB Segment of the firm provides financial advisory services in areas including mergers and acquisitions, divestitures, restructuring and underwriting services including public offerings and private placements of common and preferred stock.

Read about Top 10 Banks in India.

Trading and Principal Investments

The Trading and Principal Investments segment trades and invests in fixed income and equity products, currencies and more and clears client transactions on stock, options, and futures exchanges.

Asset Management and Securities Services

As the name very well suggests the Asset Management and Securities Services segment of Goldman Sachs provides investment advisory and financial planning services.

Read more about Leading Asset Management Companies in India.

Indian Operations

Goldman Sachs has its operations in India as well and operates from Mumbai majorly. The company’s annual revenue in India from all of its businesses is about $100 million. Company has been ranked:

• 2nd in mergers and acquisitions and
• 13th in arranging local equity sales (Bloomberg)

The company’s advance was helped by its role advising Reliance Industries, headed by billionaire Mukesh Ambani, which sold stakes in 23 oil and gas areas in India to BP in February for $7.2 billion.

Opportunities in India

Goldman Sachs is the only major foreign securities firm in India without either a commercial-banking license needed to engage in currency transactions, or a permit to underwrite government bonds. Also, companies in India are reluctant to pay for advice on mergers. Banks accept tiny fees for taking state enterprises public because they want to build goodwill with the government and advance in deal rankings.

1. India is among the emerging markets that Goldman Sachs is targeting, as the firm faces more restrictive rules in the U.S. and Europe on how it can deploy capital
2. Emerging markets – India is one of the emerging economies which has more room for further global expansion
3. Strong investment banking operations
4. With the changing macroeconomic environment in India, company has good opportunity to expand its operations
5. Can evolve as a leading Indian financial services firm, given the increasing opportunities in India
6. The FDI in retail and aviation and other reforms taken by the current UPA government would help the company tap prospects company willing to go for M&A and other restructuring
7. The reforms in the banking sector and infrastructure will help the company tap new players for fund raising.

Thus we can conclude that Goldman Sachs is having a good opportunity in the emerging market like India.