October 2007
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India Infoline looking at a Rs 200 crore PE funding

Brokerage house India Infoline is looking at a Rs 200 crore private-equity funding for its recently started consumer finance subsidiary, a senior company official said on Tuesday. The deal is expected to be concluded this quarter.

“We are talking to several private-equity players of repute, though nothing has been finalised. We expect to conclude the transaction during the current quarter,” chairman and managing director Nirmal Jain told analysts after declaring its July-September quarter results.

Last quarter, from distribution of retail finance products like personal and home loans for other banks, India Infoline entered the personal finance space on its own through Moneyline brand.

During the quarter, it managed a book size of Rs 25 crore and has suffered a loss of Rs 5.5 crore. It expects to break even in 2-3 quarters.

Overall for the quarter, India Infoline reported revenues of Rs 195 crore, up 146% from a year ago, and 46% from sequentially. Net profit rose 157% on-year to Rs 36 crore.

The company earned 56% its income from equities brokerage and 15% from insurance, with the balance coming from commodities, merchant banking and mutual funds.

“We have 596 branches in 345 cities and going forward we will not increase it significantly from here. The focus is now on how to make them more productive. We feel that 50-60% of the branches haven’t reached their full potential,” Jain said.

It intends to leverage its extensive branch network to expand its consumer finance division to tier-II and tier-III cities in the coming quarters.

“We are bullish on the business. When we were distributing for ICICI Bank and Citi Financial, we had the potential to mobilise Rs 30-40 crore a month. We recruited experts and put in place a robust risk management system,” Jain said.

Currently, the company’s institutional equities team has 35 people, including research analysts and dealers.

The institutional research team has launched their first product “The Front Page”, which is a daily synopsis of Indian stock markets with actionable ideas. The company is expanding its research coverage and getting itself empanelled with leading foreign financial institutions and mutual funds.

Source: DNA India

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