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Centrum Capital’s forex business to raise capital from Jacob Ballas

01 February, 2017

Centrum Capital Ltd’s foreign exchange business unit Centrum Direct Ltd is raising capital from New York Life-backed Jacob Ballas as part of the group’s expansion plans, according to a disclosure. 

Financial services firm Centrum Capital has informed stock exchanges that its board approved the sale of a minority stake in its wholly owned subsidiary Centrum Direct, to NYLIM Jacob Ballas India Holdings IV and Jacob Ballas Capital India Pvt. Ltd, subject to approvals, including that from the Competition Commission of India (CCI).

Reports published by The Economic Times and Mint said Centrum Direct is raising $50 million (around Rs 338 crore) by diluting 30% stake at a valuation of about Rs 1,000 crore.

Last week, Centrum Capital’s subsidiary Buyforex India Ltd acquired 100% equity shares of Krish And Ram Forex Pvt. Ltd from Business Match Services (India) Ltd and accordingly, Krish And Ram Forex become a step-down subsidiary of Centrum Capital.

The 40-year-old group has been aggressively prioritising its business mix and has made senior hires and acquisitions to chase growth at a faster pace. 

On Monday, it hired former co-founder and managing director of Blue River Capital Shujaat Khan to lead its asset management businesses.

Khan joined a host of senior hires Centrum made in 2016, including Sanjay Shukla of Centbank Home Finance Ltd to lead the housing finance segment and Jaspal Bindra, former chief executive of Standard Chartered Bank Asia Pacific, as executive chairman of the group.

The plans for consolidation in the group gained momentum after Bindra took over as executive chairman of the financial services firm in April last year.

Centrum Capital is a Securities and Exchange Board of India (SEBI)-registered category I merchant banker (listed on BSE) with over two decades of presence in capital markets providing advisory services across equity and debt, including equity capital markets, M&A advisory, corporate finance & advisory, primary & secondary debt placement, project finance and corporate debt restructuring. Its retail arm provides integrated solutions for private wealth management, portfolio management, stock broking and foreign exchange trade.

PE investors

The group has been reviving its growth by venturing into various business segments. The move has resulted in its stock rallying despite firm’s revenue declining 10% and net profit falling by around 50% for the year ended 31 March 2016.

Leveraging the stock’s performance, in September, private equity firm Everstone Capital part-exited its eight-year-old investment in Centrum Capital. The group’s promoters picked a small stake in the company from Everstone Capital.

In December, JBCG Advisory Services Pvt. Ltd, that counts the current chairman Bindra and past chairman Chandir Gidwani as directors, acquired 4.8% stake in Centrum Capital from Everstone for Rs 50 crore.

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Centrum Capital’s forex business to raise capital from Jacob Ballas

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