Goldman Sachs is one of the last few top global investment bankers to establish an outfit in India. Earlier, Merrill Lynch had tied up with DSP Financial and Morgan Stanley with JM Financial. CS First Boston and JP Morgan had also set up their arms in India.

The proposed company will focus primarily on cross border business in continued co-operation with Kotak Mahindra Capital Company (KMCC) and Kotak Securities (KS) under the alliance. Kotak will become chairman of Goldman Sachs India, which will replace Goldman Sachs representative office in India.

Simultaneously, both Goldman and Kotak have announced the extension of Goldman Sachs and Kotak Mahindra's strategic alliance for a further three years. The strategic alliance involvesco-operation and resource sharing between Goldman Sachs and the two Kotak Mahindra companies over a wide variety of Indian investment banking activities.

KMCC is to be owned 75 per cent by Kotak Mahindra Finance Ltd (KMFL) and 25 per cent by Goldman Sachs, while KS is owned 75 per cent by Uday S Kotak and 25 per cent by Goldman Sachs. Uday Kotak, who will take over as chairman of the new company, said: "Our new joint venture will focus in the long term on advisory services for mergers and acquisitions involving multinationals and Indian companies, besides advising clients on cross-border equity floats."

Both partners have been involved in the disinvestment of PSUs and have successfully handled cross-border transactions involving MTNL and IPCL.