Infrastructure Development Finance Company (IDFC) has hiked its stake in SSKI, a Mumbai-based privately held domestic corporate finance and institutional securities company from the current 33.33% to 66.67%. According to market talk, IDFC is said to have hiked its stake by shelling out Rs 150 crore. The company had bought the initial 33% stake in September 2006 for Rs 100 crore. Prior to the current deal, IDFC, Shripal Morakhia and employees held around 33% each in the brokerage entity.
The development finally puts to rest all rumours related to the stake sale of Mr Morakhia, promoter of SSKI. Names of JM Financial and Reliance Money were also doing the rounds as potential acquirers.
In a stock exchange announcement, the infrastructure major has said: “Through this investment, (IDFC) and SSKI propose to work together by pooling their relationships and expertise to provide investment banking and capital markets solutions especially to infrastructure clients”. The stock of IDFC gained a little over 1% on the BSE to end at Rs 131.5 on Tuesday.
The move comes on the back of reports that Citigroup Venture Capital (CVC) has bought an 85% stake in retail brokerage Sharekhan for around Rs 650 crore. The private equity arm of Citigroup is said to have bought the stake from Sharekhan’s promoters and a few other investors. While Mr Morakhia holds a 37% stake in Sharekhan, General Atlantic, Intel Capital and HSBC Private Equity together hold around 45%, with the remaining held by employees.
Both the entities – Sharekhan and SSKI – belong to Mr Morakhia. While SSKI is in the institutional arena, Sharekhan is more known for its retail clientele. SSKI is said to have reported a net profit of around Rs 50 crore for the financial year ended March 31, 2006, while Sharekhan is reported to have made a net profit of around Rs 35 crore for the same period, on a topline of around Rs 125 crore.
Source : Economic Times