Financial institution IFCI Ltd has received approval from the board of directors to divest part of its holding in custodial and depository services provider Stock Holding Corp of India Ltd (SHCIL), as per a stock market disclosure.
The financial terms of the transaction, however, have not been disclosed.
Established in 1986, SHCIL is promoted by IFCI and six other public financial and investment institutions. At present, IFCI is the largest shareholder in SHCIL with a 52.86 per cent equity stake.
Other shareholders in SHCIL include Life Insurance Corporation of India, General Insurance Corporation of India, New India Assurance Company Ltd, United India Insurance Company Ltd, The Oriental Insurance Company and National Insurance Company.
SHCIL provides custodial services to financial intermediaries (mutual funds, FIIs), depository services to retail investors, as well as e-stamping, FD and bond distribution, mutual fund products, GOI Bonds and loan products, PF fund accounting, SGL constituent account services, etc, to institutional investors, banks, mutual funds and retail investors.
For the financial year 2014-15, SHCIL posted revenues of Rs 340 crore, an increase of 16 per cent. The company’s net profit grew 44 per cent to Rs 78 crore in the fiscal over the previous year.
Meanwhile, it has also obtained board’s approval for disinvestment of entire stake in Assets Care and Reconstruction Enterprise Ltd (ACRE), an asset reconstruction company, for an undisclosed amount. As on September 2014, IFCI held 19.34 per cent in ACRE, as per information available on the company’s website.
ACRE is engaged in the acquisition of non-performing financial assets (NPAs) from banks/financial institutions (FIs) as per the guidelines issued by Reserve Bank of India.
Last week, the state-run lender IFCI also part-exited its investment in the National Stock Exchange Ltd (NSE) by selling a small tranche of shares for Rs 29.63 crore. It sold 75,000 shares or 0.17 per cent stake in NSE at Rs 3,950 apiece, without disclosing the name of the buyer.
Earlier in September, it had sold 1.5 per cent stake in the bourse for Rs 263.25 crore ($39.7 million).