Industrialist BK Modi has acquired 51% stake in forex and money transfer firm Wall Street Finance and is going to follow it up with an open offer for another 20% stake in the public listed firm.

This marks a dramatic change in fortunes of Wall Street Finance, which was till recently counted as a Reliance ADA group firm. Anil Ambani's Reliance Money had however exited the company by selling its entire 36.8% holding last week for over Rs 22 crore.

In a market transaction, Modi-promoted Spice Investments & Finance Advisors acquired over 16.64 lakh equity shares representing 14.32% in Wall Street Finance at a price of Rs 55 per piece (apparently from the promoters Patel Holding and Arif Asgar Patel), in a bulk deal on the BSE. The promoters have exposure in Patel Integrated Logistics, one of India's largest fleet operators.

In addition, Spice struck an off market transaction to acquire 36.6% from Transways Combines, a unit of Wall Street Finance. Transways had bought the shares from Reliance Money after the firm decided to quit the investment in less than one year after picking up 33.55% stake in October 2008 and hiking it to 36.58% through open market share transactions.

Enam Securities was, reportedly, the merchant banker to the deal. Wall Street scrip was up 8% to hit Rs 62.9 as of 2 PM on Tuesday.

The original deal where Reliance Money picked stake in Wall Street Finance was championed by Sudip Bandyopadhyay, the CEO of Reliance Money, who has since then quit the firm. He had before quitting also struck the other deal where Reliance Money announced that it is acquired majority stake in UK-based exchange and money transfer firm No 1 Currency. Reliance Money Express, a subsidiary of Reliance Capital was picking 51% in Edinburgh-based No1 Currency for an estimated Rs 100 crore ($20 million).

The two deals would have meshed together with the first transaction where Reliance Capital, the group’s finance arm had in November 2006 acquired TravelMate from Swiss travel and tour firm Kuoni to enter the currency exchange business. This business was renamed as Reliance Money Express. The UK deal allowed it to foray into the international forex business and to capitalise on the 1.6 million NRI population in the UK for money remittance business. This also mark the first overseas acquisition of a foreign exchange company by an Indian firm.


The deal marks a significant exposure in financial services business for Modis who have been sitting with cash after selling out the telecom business to Birlas last year.

Early this year, maverick businessman BK Modi Spice had also thrown his hat to acquire control of accounting scam hit Satyam Computers. Although he lost out in that bid, he had followed up with a deal in Singapore where Spice bought around 20% stake in Singapore Stock Exchange listed IT company MediaRing Ltd for about Rs 200 crore (~$40 million).

According to this DNA report, the move to buy into Wall Street is backed by B K Modi’s daughter Divya Modi who is also the executive director of Spice Finance, the flagship non-banking firm of the group. She has been looking to enter the remittances business and recently at the launch of a private equity fund with 3 Degrees Asset Management of Singapore, she had said Spice Finance will invest Rs 500 crore in distressed assets and special situations, as well as other niche businesses such as remittances and over-the-counter exchanges.

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