The bulls are on a rampage and the tiger is roaring, Sharekhan the retail broking arm of SSKI with 120 branches across 150 cities wants to expand its business and wants a strategic financial investor.
NDTV has learnt that the investor might actually buy out Sharekhan. PE funds TPG and Citigroup's CVC have emerged as the frontrunners to pick up controlling stake in Sharekhan.
Promoter Shripal Morakia and family owns less than 40 per cent stake in the company, employees own 15 per cent while PE funds General Atlantic Partners, HSBC PE, Intel Cap own 45 per cent.
Both Morakia and employees are looking at an exit. Even though TPG and Citi refused to comment when approached by the NDTV, Sharekhan's CEO did admit that a deal is brewing but refused to divulge much.
Expansion plans
“We are in fairly advanced stages of the negotiations for issuing our equity to financial investors. I cannot therefore comment further, whether the promoter will offload, whether the existing investors would readjust themselves or whether even the employees will look at an exit option,” said Tarun Shah, CEO, Sharekhan.
NDTV has learnt that the final contours of the deal are being worked out. Sources say that the deal is likely to be at Rs 550-Rs 575 per share valuing Sharekhan at approximately Rs 650 crore.
Sharekhan wants to be an Indiabulls or an India Infoline who have over 500 branches across the country. So Sharekhan wants to step on the gas to open at least 250 branches in the next two years, which is double the existing number.
And that kind of expansion is not surprising as India is still fertile ground for financial services firms because less than 3 per cent of the population invest in the markets.
Source : NDTV Profit