Brokerage firm Inditrade Capital Ltd said on Thursday a unit has agreed to acquire Edel Commodities Trading Ltd (ECTL), a step-down subsidiary of Edelweiss Financial Services Ltd, in a cash-and-stock deal.
The acquisition by Inditrade Business Consultants Ltd comprises at least Rs 13 crore ($1.95 million) in cash and shares worth 9% of its paid-up equity capital, Inditrade Capital said in a stock-exchange filing.
Inditrade Capital will continue to hold more than 90% stake in Inditrade Business after the deal is completed, it said.
ECTL is a wholly owned unit of Edel Commodities Ltd, which in turn is a fully owned subsidiary of Edelweiss. The deal includes the acquisition of ECTL’s subsidiaries in Chad and Nigeria.
Inditrade Business focuses on procurement, financing and export of commodities. It operates in seven states and is scaling up its operations in India and abroad, the filing said.
Inditrade Capital was previously known as JRG Securities Ltd. Last year, Sudip Bandyopadhyay, former head of Reliance Money, bought the stake of Baring Private Equity Partners India in Inditrade. The PE firm sold its stake at a loss. Baring PE had acquired the stake in 2007 and took management control of the brokerage in 2009.
Bandyopadhyay quit the Reliance Capital Ltd group firm a few years ago and was previously working with Destimoney. He joined hands with two other companies—Juno Moneta Technologies and AT Invofin India—to acquire the entire 48.73% stake in Inditrade from Baring PE India. The deal was worth Rs 48.36 crore ($7.3 million).
The deal for ECTL comes after Inditrade last month said it would its stake in Dubai-based JRG International Brokerage over the next 24 months to up to 51%.
Shares of Inditrade Capital jumped 9.8% to Rs 40 in a weak Mumbai market on Thursday. Shares of Edelweiss fell 1.7%.
Inditrade reported revenue of Rs 15.27 crore for 2015-16. It has a market value of around Rs 100 crore. The Kochi-based firm has branches in New Delhi, Tamil Nadu, Kerala and Andhra Pradesh.
Deals in the brokerage segment
The brokerage sector attracted a lot of PE money in 2007, but has since then seen only selective transactions. A few investors have made money in this segment.
Everstone Capital has been selling its shares in a bid to exit its eight-year-old investment in Centrum Capital. Last year, BNP Paribas acquired brokerage firm Sharekhan for around Rs 2,200 crore while Fairfax Holdings increased its stake in IIFL Holdings Ltd, which also provides brokerage services.
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