Standard Chartered Bank is all set to acquire 49% strategic stake in UTI Securities from Securities Trading Corporation of India (STCI) for nearly Rs 140 crore. The deal, that values the UTI Sec at Rs 280 crore, is set to be inked by the end of the week, market sources said. The deal values the company about Rs 15 crore higher than Rs 265 crore that STCI itself had paid when it bought the UTI Sec from its founder-promoter, Specified Undertaking of the Unit Trust of India (SUUTI) in April 2006.
Under the terms of the deal, Standard Chartered Bank will have the option to buy another 25% from STCI after a year.
Industry players said the deal is hugely positive for Standard Chartered Bank, STCI and UTI Sec as the three will try to synergies their individual expertise in different segments of the financial market.
UTI Sec has presence in retail and institutional stock broking, internet trading, portfolio management services, fixed income and merchant banking, mainly handling IPOs for small and medium enterprises. StanChart services some of the richest individuals and companies, a vast majority of which have interest in stock as well as debt market. In addition to the bank's high-end domestic customers, it also services a large number of foreign institutional investors like foreign mutual funds, insurance companies and pension funds.
While the bank will be able to offer its customers the whole bouquet of services that UTI Sec currently offers, the later would get to tap the bank's high-end captive clients, industry players said. StanChart would be able to tap UTI Sec's clients in the SME segment, one of the focus areas for StanChart.
Source : Times of India