The Hindu Business Line : ICICI Ventures, Baring PE invest Rs 500 cr in Karvy Stock Broking

Hyderabad, Nov. 15. ICICI Ventures and Baring Private Equity Asia will invest around Rs 500 crore, to pick up a 25 per cent stake in Karvy Stock Broking Ltd (KSBL), part of the Hyderabad-based, Karvy Group.

The infusion of funds will see the exit of Pacific Century Group, Hong Kong which held an equity of 20 per cent in KSBL. MAPE Advisory acted as the exclusive financial advisor to Karvy and its shareholders.

The investment in KSBL represents Baring Asia’s largest investment in India to date. Advising funds with over $2 billion in assets, Baring Private Equity is investing in Karvy through an undisclosed affiliate.

While not disclosing the finer details on the break up of the investments by the two entities or the affiliates at this juncture, Karvy officials said the funds would be deployed for expansion, acquisition and into forex broking.

KSBL, which is going through troubled times with restrictions imposed by the SEBI, has over 580 offices covering 350 cities/towns and offers broking services to over 3,50,000 retail investors. A member of the NSE and the BSE, it is a leading distributor of investment products including IPOs, mutual funds, debt, tax saving instruments etc.

The broking firm has plans to expand into the retail sector and set up an NBFC (non-banking finance company), apart from strengthening offices in Dubai and New York and cross border investments through the funds. Especially, it plans to take advantage of the RBI permit to allow investments up to $2 lakh abroad, Karvy officials told Business Line.

Commenting on the deal, Ms Renuka Ramanath, MD & CEO of ICICI Ventures, which operates funds to the tune of over $2 billion, said “Karvy has built a strong pan-India distribution network and customer franchise and it can cater to the fast growing financial services requirement of the the upwardly mobile Indian retail market”.

The CEO of Baring Private Equity Asia, Mr Jean Eric Salata, said: “Karvy’s diversified business line covering everything from stock broking to mutual funds to insurance are a strong competitive advantage which positions it well for further growth”.

Mr C. Parthasarathy, Chairman – KSBL, said: “We are committed to create a strong network across the country and emerge as the top integrated financial services provider in the country. Our relation with ICICI Venture and Baring Private Equity Asia will surely help us to further strengthen our position”.

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