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Our Bureau

Mumbai, Dec. 24 Securities broking company India Infoline Ltd said it would raise Rs 555 crore ($141 million) through preferential issue of a 6.48 per cent equity stake to a Singapore-based investment firm.

Orient Global Tamarind Fund Pte Ltd will be issued 37 lakh shares in India Infoline at Rs 1,500 per share, the Indian company’s board decided on Monday.

This deal values India Infoline at over Rs 8,500 crore.

A further investment of Rs 197 crore ($50 million) will be made by Orient Global for a 10 per cent stake in India Infoline Marketing Service Ltd (IIMSL), the Indian company’s insurance subsidiary.

The India Infoline scrip was fairly indifferent to the development, falling by 0.74 per cent on Monday to close at Rs 1,535 per share.

The capital provided by Orient Global will help the company further grow in the broking and insurance distribution space, said Mr Nirmal Jain, Chairman and Managing Director, India Infoline.

The funds will boost India Infoline’s net worth and take care of the company’s capital requirements, said an India Infoline official.

In the insurance space, the funds provided by Orient Global will be used for general corporate purposes, and also to expand IIMSL’s branch network, establish call centres, invest in new technology and training facilities.

IIMSL does its business through its two subsidiaries, India Infoline Insurance Services Ltd and India Infoline Insurance Brokers Ltd.

India Infoline Insurance Services is a distribution company which sells the insurance products of ICICI Prudential Life Insurance as a corporate agent.

India Infoline Insurance Brokers Ltd has applied for an insurance broking licence and is awaiting IRDA approval to start operations.

In November this year, Orient Global had invested Rs 300 crore ($76.7 million) for a 22.5 per cent stake in India Infoline Ltd’s consumer finance subsidiary, India Infoline Investment Services Ltd.

Other Indian broking firms too have been raising capital through private placement of equity. Earlier in the year, BNP Paribas acquired a 27 per cent stake in Geojit Financial Services through a preferential allotment of shares.

More Stories on : Financial Services | Preferential Allotments

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