HSBC InvestDirect India Ltd (HIL), formed after HSBC's acquistion of IL&FS Investmart in 2008, has decied to exit its insurance broking business IL&FS Investsmart Insurance Brokers Ltd (IIIBL). This is in line with company’s long term strategy to align its business, said the company in its filing to the Bombay Stock Exchange.
The board of directors of the company has approved discontinuation of the insurance broking business by IIIBL, where it owns 45% of the total paid up capital. HIL will now surrender its insurance broker licence to Insurance Regulatory and Development Authority (IRDA), added the filing.
HSBS InvestDirect had transferred a 35% stake in IIIBL to IL&FS Investsmart Employees Welfare Trust last year. IIIBL reported a net loss of Rs 1.6 crore in 2008-2009.
The shares of HSBC InvestDirect were trading at Rs 250.25 at 12:45 PM on Wednesday, down by 0.3%.
HSBS InvestDirect offers equity broking, wealth management, IPO distribution and portfolio management services. One of HIL's subsidiaries, HSBC InvestDirect Securities India Ltd has pan India presence with 240 outlets across over 80 cities. Under the umbrella of HIL, securities financing is carried out by the NBFC subsidiary that includes margin funding, promoter funding, loan against securities and IPO funding.