The Stock Holding Corporation of India is expected to become a subsidiary of IFCI soon. According to sources, IFCI is all set to pick up IDBI Bank’s stake in the custodian at a price of ₹840-860 a share.

Sources said the process of divestment is on and requisite approvals are being sought for the deal to go through.

According to SHCIL’s last annual report, IDBI Bank held 18.95 per cent stake in SHCIL and IFCI 33.91 per cent. If IFCI buys out the IDBI Bank stake, its shareholding would increase to 52.86 per cent making SHCIL its subsidiary.

In a stock exchange filing dated March 3, IDBI Bank said its board of directors had given in-principle approval for initiating the process of divestment of its shareholding in SHCIL.

IFCI in another stock exchange filing on March 21 said it was in the process of getting an independent valuation of SHCIL done, besides initiating the process of getting regulatory approvals and no-objection certificates from other promoters. On completion of the deal, IFCI would have to incorporate the financials of SHCIL within itself as a subsidiary. SHCIL would then be subject to audit by the Governments auditor (CAG).

It is noteworthy that IFCI has a subsidiary IFIN, which is a broker and depository participant, an area where SHCIL too has presence.

(This article was published on March 28, 2014)
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