The Hindu Business Line : Motilal Oswal to divest 20% stake to strategic investor

MOTILAL Oswal Securities has proposed to offload about 20-25 per cent of the promoters' holding to one or more strategic investor. The latter may include private equity firms.

The broking outfit, which hopes to utilise the proceeds to speed up its expansion activities, has had some talks with select players. However, no specific names are being disclosed at this stage, Mr Raamdeo Agrawal, MD, Motilal Oswal Securities(MOS), indicated.

"This (the sale proceeds) will provide us with growth capital," he said, adding that the company's expansion programme will have to be financed adequately. The idea is to increase business by tapping new segments, especially at the retail end.

MOS, which is also contemplating an IPO, has lately seen a significant escalation in operations, due to a surging equity market and the fresh crop of investors who have been drawn towards it. The company is also aware that several broking entities, including a few extremely closely held ventures, have recently offloaded stakes to the public. A few relatively new players, such as Indiabulls, have further made inroads on this front.

For Motilal Oswal, which was set up in the late 80s, a considerable part of its business is on account of institutional clients. Most of the FIIs that are now active in the Indian market have started routing part of their transactions through the company, although the share of retail has also increased lately.

Acquisitions are also being considered as a method of expansion, Mr Agrawal mentioned, while referring to the company's recent acquisition of Gayatri Capital, a broking firm with a presence in Andhra Pradesh. A similar move may well be mounted in North India, where the company intends to expand its network to leverage the large opportunities present in the region.