HSBC Buys 73 percent of IL&FS Investsmart

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May 19 – British banking company HSBC Holdings has expressed interest to buy 73.2 percent of IL&FS Investsmart, an Indian brokerage firm, for 10.03 billion rupees (US$235 million).

HSBC will acquire 43.85% from a Mauritius-based unit of E*Trade Financial Corp and the rest from the Indian brokerage's founder, Infrastructure Leasing and Financial Services, for Rs 200 a share, HSBC said in a statement e-mailed from Hong Kong. "India presents a huge scope for its large savings to be invested in equities, debt and commodities," said Dipak Acharya, who helps manage the equivalent of $22 million as a fund manager at BOB Asset Management Co in Mumbai, reported the Times of India.

India has more than 20 million retail investors and the country’s two main stock exchanges are the world’s third- and fifth-largest by transaction volume, said Alexander Flockhart, HSBC’s chief executive for the Asia Pacific region, reported The New York Times.

Mr Tarun Kataria, Chairman, HSBC Securities and Capital Markets Ltd, said: “The acquisition will bring to us a retail brokerage business, an on-line broking platform, a mid-cap corporate and investment banking business and a mid-cap research business.” This will go well with our institutional broking business, he told The Hindu Business Line.

HSBC is the third foreign bank to have acquired a retail broking business in India in the recent past. French bank BNP Paribas acquired Geojit Securities, and Standard Chartered Bank bought 49 per cent of UTI Securities, both last year.

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