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Our Bureau

Mumbai , Sept 29

SEVERAL FIIs including Citigroup and Merrill Lynch bought shares of IFSL Ltd, against whose promoters SEBI has passed an order on Wednesday.

SEBI has barred Sonal Fincap, the promoter of IFSL, and the directors of the company from dealing in the company's shares with immediate effect. The company has also been barred from issuing any fresh shares.

Filings with BSE shows that Citigroup Global Markets had bought 43.47 lakh shares at average price of Rs 33.25, Merrill Lynch Capital Market bought 16.65 lakh shares at around Rs 26-27 and ABN Ambro Bank London bought 39.50 lakh shares at Rs 27.7.

Filings with the exchange also show that Goldman Sachs sold 5 lakh shares at Rs 33.62 on September 12 and Seahaven Investment sold 5 lakh shares around Rs 35.85. All these transactions happened in August and September.

Other big investors in the company according the company's June shareholding pattern are; Fortis Securities (2.34 per cent), Fortis Finvest (1.16 per cent), Indiabulls Financial Services (2.40 per cent).

The SEBI decision follows the sudden spurt in the stock price of IFSL. Its share price moved from Rs 15 in September 2004 to around Rs 233 in June 2005. The company went through a share split on July 1, 2005 when Rs 10 share was split into Re 1 and the share price, which was at Rs 26.70 on July 1, 2005 after the split, rose to Rs 33.65 on September 13, 2005.

What was intriguing was the coincidence of this spurt in trading volume with the trading in the share of the company by the promoters through off market transactions, SEBI said in its order.

In today's trading, the stock price of the company was down 10 per cent at Rs 24.35 on BSE.

The order by SEBI had also stopped stock brokering firms; Indiabulls Securities, Insight Share Brokers, Fortis Securities Ltd, Joindre Capital Services, India Infoline Securities, Ruchiraj Share Stock Broker, Penninsular Capital Market, Archi Shares & Stock Brokers not to buy, sell or deal in securities of IFSL Ltd on behalf of the promoters, directors.

The CEO of IFSL, Mr Deepak Kulkarni, said the company has taken note of the order passed by SEBI and is consulting its legal experts on the issue. However, he said the business plans of the company remain unaffected by this order and the company is continuing its operations normally.

On the SEBI ban on issue of fresh equity shares, he said the present projects would be financed through internal accruals and debt and would not in any way be dependent upon the proceeds of the proposed preferential issue.

However, the expansion plans of the company, which may require significant infusion of funds, may be affected if it is unable to raise money through the alternative sources its seeks to explore.

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