Japanese financial services giant Orix is picking up a 5% stake in IL&FS Securities Services (ISSL) for Rs 36 crore. The stake purchase by the $8-billion Japanese company puts the enterprise value of ISSL at Rs 720 crore. ISSL was initially set up as a captive division within IL&FS to provide back office services. It was hived off as a separate wholly owned arm of IL&FS last year.
Now, the parent company is transferring the licenses it holds for depository participant, custodian, professional clearing member of commodity and securities exchanges to ISSL. After the transfer, ISSL would start these activities apart from offering back office services like transaction processing, credit monitoring and record keeping.
Orix already has a number of equity ventures in association with IL&FS. The Japanese company had made its first investment in India in 1995 by acquiring a 20% stake in IL&FS. Currently, it holds 23.82% stake in the unlisted financial services major. IL&FS, in turn, holds stakes in listed arms such as IL&FS Investsmart and IL&FS Investment Managers.
Apart from the parent company, Orix also has stake in Orix Auto Infrastructure Services, IL&FS Education & Technology Services and IL&FS Asian Infrastructure Managers.
Orix Auto Infrastructure Services provides maintenance lease for automobiles and equipment, along with direct financing leases for automobiles and equipment, commercial vehicle loans, car rentals, business transport solutions, construction equipment rental and logistics management.
IL&FS Education & Technology Services provides instruction and learning tools, while IL&FS Asian Infrastructure Managers is an infrastructure development fund for projects in Indonesia, Philippines, Malaysia, Thailand and Vietnam.
Source : Economic Times