The Hindu Business Line : Standard Chartered to acquire 49% stake in UTI Sec for Rs 147 cr

Strategic deal: Mr Dipankar Basu (left), Chairman, STCI, and Mr Neeraj Swaroop, CEO-India, Standard Chartered Bank, at a press conference in Mumbai on Thursday. –

Our Bureau

Mumbai, Aug. 23 Standard Chartered Bank has agreed to acquire 49 per cent stake in UTI Securities from the Securities Trading Corporation of India (STCI) for Rs 147 crore in cash.

Under the arrangement, Standard Chartered Bank has the option to raise its stake by another 25 per cent in 2008 and gradually buy out 100 per cent of UTI Securities by 2010, subject to regulatory approvals.

“Under the arrangement, Standard Chartered has the option to increase its stake to 75 per cent at a fixed price. In 2010, the bank can purchase the balance stake at a price based on a formula, which caps the minimum and maximum price,” said Mr Neeraj Swaroop, CEO-India, Standard Chartered Bank.

Online platform

“The partnership will enable Standard Chartered to broaden its product offering in wealth management and private banking within India and the non-resident product portfolio in footprint countries,” he added.

UTI Securities offers retail broking, online trading, depository services, portfolio management services, equities research, investment banking, fixed income securities and distribution of third party financial products across 60 cities in India.

“One of the reasons why UTI Securities was appealing to Standard Chartered Bank is its strong online trading platform,” said Mr G. Narayanan, Managing Director, STCI.

Customer base

STCI, one of the leading primary dealers in the country, had bought 100 per cent of UTI Securities from the Administrator of the Specified Undertaking of the Unit Trust of India in February 2006, for Rs 265 crore.

UTI Securities reported a net profit of Rs 6.5 crore in 2006-07 and received Rs 65 crore in revenues. The company has 41 branches and 174 franchises.

UTI securities has 40,000 clients and around 70 per cent of the business comes from retail broking. “UTI Securities will provide us with a customer base in retail business and help us tap the growing affluent segment of population. We would also like to grow the institutional business with overseas linkages,” Mr Swaroop said.

The composition of the board of UTI Securities will have four members from STCI, three members from Standard Chartered Bank and one or more independent members.

More Stories on : Financial Services | Mergers & Acquisitions | Foreign Banks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Standard Chartered to acquire 49% stake in UTI Sec for Rs 147 cr

SEBI clears NSDL application

Indiabulls gets BQ-1 grading

ICICI Prudential launches Indo-Asia Fund

Hindustan Chem: Losing ground

Volatile movement

Sensex see-saw, shock and awe

Merrill to expand client and employee base

REC files draft red herring prospectus

‘Political instability has not changed our investment model’