VCCircle

Last of the Indian-MNC joint ventures in the Indian financial services space has been dissolved with the split of JM Financial and Morgan Stanley. JM has bagged a net sum of $425 million from the deal. JM has sold its 49 per cent stake in the broking arm for $445 million and bought out the investment banking business (at a book value of $20 million) from Morgan Stanley. They have ended a seven year-old relationship which was created in 1999.

When DSP and Merrill Lynch and Kotak and Goldman Sachs split in the last year and a half, everyone had expected a similar fate to the JM Morgan Stanley JV too.,

In December 2005, Merrill Lynch split with Indian partner Hemendra Kothari in DSP Merrill Lynch (DSPML) ending a 10-year alliance. Merrill paid $500 million to acquire Kothari's 50 per cent stake in DSP Merrill Lynch (and minority shareholders who held 2.27%). Kothari still retains a 10 per cent stake in DSPML and as part of the deal also acquired majority ownership in DSPML's mutual fund subsidiary. He continues as the chairman. The difference in the deal is that there was a non-compete clause with Kothari, substantiating the premium he got for his stake.

In March 2006, Uday Kotak's Kotak Mahindra bought out Goldman Sachs' 25 per cent ownership in its investment banking and securities joint ventures for an aggregate $75 million. Goldman Sachs has set up its own shop in India, and is focusing a lot in principal investing.