The Hindu Business Line : Citigroup keen to buy 85% in Sharekhan for Rs 650 cr

Chennai, June 27 Citigroup Venture Capital has expressed interest in buying 85 per cent stake in retail brokerage firm Sharekhan Ltd for about Rs 650 crore.

Details of the deal, such as whether existing shareholders will offload their stake partly or completely, are being worked out, according to Mr Jaideep Arora, Director, Sharekhan.

The post-deal valuation would be about Rs 825 crore, he told Business Line.

Currently, the Morakhia family owns about 44 per cent stake in the company while 42 per cent is held by private equity firms HSBC Private Equity, Intel Capital and General Atlantic.

“We are working out how much stake each of these parties will have to offload. We are also evaluating options of other private equity firms buying stake in the company,” he said.

This exercise is expected to be completed early next month.

The company plans to use the capital raised through private equity to fund its Rs 200-crore expansion, which includes expanding its online platform across India and launching international operations in Dubai by November.

In Chennai to inaugurate Sharekhan’s exclusive outlet that will distribute ICICI Prudential Life Insurance products, Mr Arora said that the company may go public with an IPO next year, after spending the capital raised through private equity partners.

The company has entered into a tie-up with ICICI Prudential to distribute its products through all Sharekhan offices, besides setting up some exclusive outlets.

This tie-up may also explore possibilities for launching exclusive products for Sharekhan customers, Mr Arora said.

Sharekhan has introduced ‘Share Mobile,’ a mobile application using GPRS technology that tracks share prices, provides updates and also facilitates trading.

Currently being beta tested by a few thousand users, the application is available for free but without the trading option.

Once the SEBI issues guidelines on mobile trading, the option would be available to users, Mr Arora said.

Pricing for the operator independent application has not been decided yet.

Sharekhan has over 679 branches in 234 cities and about four lakh trading members.

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