Standard Chartered may buy remaining UTI Sec pie
Apart from lining up an entry into the Indian corporate equity business scenario in a major way, Britain’s Standard Chartered is mulling over acquisition of the remaining 26 per cent stake in the erstwhile UTI Securities.
The move is to turn real in another three months time, when the corporate equity business foray also happens. The foray will make Standard Chartered the first foreign entity to raise capital from India.
UTI Securities, as it has been made known, has been rechristened Standard Chartered Capital Market following its hike in equity to 74 per cent back in 2008. With the new decision now just three months away from execution, Standard Chartered believes that 100 per cent acquisition would become a reality in the new entity by mid-2010. We are yet to know as to what the cost of transaction would come to.
Brokerage firm UTI Securities Ltd’s 49 per cent stake had been bought out way back in 2007 by StanChart from Securities Trading Corporation of India (STCI). The deal then had a clause that StanChart would have the option to up stake to 75 per cent in 2008 and, if both partners agree, to 100 per cent by 2010. This seems to be happening now.
The acquisition is seen as a shot in the arm for Standard Chartered, which has under its roof a varied range of wholesale and consumer banking offerings. Further, the expertise boasted of by UTI Securities in retail broking and distribution.
The India market is to be seen as a very important one by Standard Chartered, and that explains the expansion plans. Standard Chartered, which filed for IDR earlier in the day for raising over 4500 million, will enter the corporate equity business segment with specific focus on IPO market. Participation in the IPO for Indian corporates would be undertaken by assisting them through institutional broking and by providing solutions for corporate equity.
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