JM Financial Services announced on Wednesday that it has entered in to a joint venture with ASK Securities. It has agreed to pick up 60% stake in the company for 58.14 crore. The 60% stake in ASK Securities would be picked either by the company itself or through any of its subsidiaries.
The JV between JM financial and ASK Securities will focus on equity research, institutional sales and trading. The transaction is expected to be completed by the second quarter of the financial year 2007-08, subject to necessary regulatory approvals.
Nimesh Kampani, CMD, JM Financial Services said, “We are very happy to partner with ASK Securities in this joint venture. With our strong investment banking franchise and deep-rooted institutional relationship, this JV will now complete the bouquet of financial services we have to offer. This JV is yet another step towards our long term growth strategy of building a financial institution of global reach.”
With this deal, JM is hoping to leverage out of ASK Securities strong presence on institutional equity trading and research. Dipti Neelakantan, COO, JM financial group said, “We had the option to develop our institutional equity business by either building it ourselves or through acquiring other companies who are already in to it.”
On expanding their presence globally Neelakantan adds, “Here too, we have the option of either going on our own, building JV or buying out. We are in talk with other players also. But we are not in a hurry and would decide at an opportune time.” Both the players had recently parted ways with their overseas partners. ASK Securities had parted ways with Raymond James in the Indian portfolio and wealth management services subsidiary ASK Raymond James. The Koticha brothers, the Indian partners, bought back the 50% stake owned by the US company, Raymond James Financial Inc. On the other hand, JM Financial parted ways from Morgan Stanley by buying a 49% stake in their joint venture JM Morgan Stanley. As per the deal JM Financial bought the investment banking business from Morgan Stanley for $20 million and sold its institutional securities for $445 million to Morgan Stanley.
Source : Financial Express