Australia-based Link Market Services, a provider of registry services and technology to financial market participants in Australia, is learnt to be in an advanced stage to pick up controlling stake in Mumbai-based Sharepro Services.
The deal, pegged at around $10 million and likely to be sealed within a month, is yet another example of the interest among foreign capital market intermediaries to build a presence in the Indian capital market.
In 2004, Australia’s leading firm in this segment, Computershare formed a joint venture with one of India’s leading share registry firms, Karvy, aiming to offer support to the sharply-growing IPO market in India.
Sharepro Services is a Sebi-registered category-I registrar and securities transfer agent with depository connectivity for both NSDL and CDSL. Sharepro Services CEO Chhaya Shah confirmed that talks were on. “Nothing has been firmed up yet. We are still talking,” she told ET.
According to sources, the Australian company is keen on picking up a controlling stake of over 51% in Sharepro. The two companies are also learnt to have agreed to let the current management run the daily operations.
The sources also said that Sharepro is yet to file for Sebi approval. They added that while Link Market is looking for up to a 74% stake in Sharepro, the Mumbai-based, unlisted company is willing to offer only up to 51% equity stake.
The company has recently gone through a lot of restructuring so as to get a favourable response from possible foreign investors. It has made large investments in technology, web-based applications and also has plans to open offices in metropolitan cities. It recently hired a new CEO from the Tata Share Registry, now known as TSR Darashaw.
Link Market has around eight million holder records under management and maintains the registers of over 1,000 securities with clients across Australia, New Zealand and South Africa. It has offices in Sydney, Melbourne, Brisbane, Perth, Auckland, Port Moresby and Johannesburg.
The sharply-growing Indian equity market has led to much interest among foreign intermediaries to enter into partnership with their Indian counterparts. Recently, NYSE picked up stake in NSE, while Deutsche Bourse picked up stake in BSE.
Indian markets have seen huge interest from the foreign investors due to the sustained bull run for over three years now. Industry experts say that the market still remains largely underpenetrated as only a small.
Source: Economic Times