Standard Chartered to buy 49% stake in UTI Securities
Standard Chartered Plc has entered into a strategic partnership with the Securities Trading Corporation of India (STCI) to acquire the latter's 49 per cent stake in UTI Securities for Rs 147 crore.
STCI owns 100 per cent of UTI Securities after acquiring it in 2006 from the Administrator of the Specified Undertaking of the Unit Trust of India.
Under the agreement, the parties have provided for necessary options to raise Standard Chartered's stake to 100 per cent in stages by 2010, subject to necessary regulatory approvals.
UTI Securities has 58,000 retail customers, 112 institutional clients and 41 branches. The company’s revenues last year stood at Rs 65 crore with profits at Rs 14 crore. StanChart is one of the biggest custodian banks in India. It has over 2 million retail customers and a large number of SME and corporate clients.
This move would help StanChart to get into the broking space in India. Other foreign banks like ABN Amro and Citi have started own retail broking operations. UTI Securities will also need to be re-branded. The UTI name can be used by the entity only till January 2008.
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