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Fortune Financial sells 22% stake

Mumbai-based financial service provider Fortune Financial Services India Limited (FFSIL) is learnt to have diluted 22% of its equity to a group of UK-based foreign institutional investors for Rs 22 crore. The investors, headed by Lytton Group Corporation, have valued the company at Rs 100 crore.

Listed on the BSE, FFSIL provides a range of financial services including investment banking, corporate advisory, stock broking and distribution. When contacted by ET, Nimish Shah, vice-chairman and MD, FFSIL, declined to comment on the possible dilution of equity. A source close to the company, however, confirmed that the deal has already been finalised.

“The deal has already been struck and the foreign investors have paid 100% of the prevailing market price of the company,” the source said. Promoters currently hold 77.88% stake in the company and the remaining 22.12% is held by private corporate bodies, NRIs and Indian public.

Post-transaction, promoters’ stake in the company will come down to around 62% and the public will hold 16% stake. The company, which focuses primarily on investment banking services for mid-cap companies, is learnt to have raised the money to part-finance its future expansion plans. The company is aggressively looking to expand its operations in the Northern region over the next 2-3 months to tap the boom in sectors like real estate.

The company is both a category I merchant banker as well as a corporate member of BSE and NSE. The group also has membership of MCX and is a depository participant with CDSL. For the year ended March 31, 2006, the company posted revenues of Rs 18.28 crore and profit before tax of Rs 9.70 crore. Nearly two-third of the company’s revenues came from its investment banking business and its distribution business contributed only 2% to the revenues.

Source : Economic Times

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