IndusInd Bank to acquire IL&FS Securities
by mukul | Photo Credit: Shah Junaid/VCCircle

Hindujas-promoted private lender IndusInd Bank has set the ball rolling to acquire IL&FS Securities Services Ltd (ISSL) for an undisclosed amount.

The company said in a disclosure to stock exchanges that it had entered into an agreement with Infrastructure Leasing and Financial Services Ltd (IL&FS), the promoters of ISSL, to buy a 100% stake in the securities firm.

ISSL had posted revenue of Rs 277.6 crore and profit after tax of Rs 39 crore in 2015-16. It had reported standalone turnovers of Rs 255.3 crore in 2014-15, and Rs 203.7 crore in 2013-14.

Incorporated in 2007, ISSL serves as a capital market intermediary for professional clearing, depository and custodial services. The firm services both retail and institutional clients, including 10,000-plus brokers, foreign portfolio investments and foreign institutional investors. The platform clocks one million transactions per day and is a clearing member on equity exchange traded derivatives.

“IndusInd is already a player in the capital market business with a client base of over 500 brokers. This acquisition brings scale to it, complements our current product offerings and fits nicely into our strategy of creating differentiated businesses with domain expertise,” Romesh Sobti, MD and CEO, IndusInd Bank said.

The proposed acquisition is expected to close within the next three months.

IndusInd Bank, which commenced operation in 1994, caters to both consumer and corporate customers. As on December 2016, it has 1,075 branches and 1,960 ATMs, and is present across 647 locations in India. It has representative offices in London, Dubai and Abu Dhabi.

IL&FS shareholders include Life Insurance Corporation of India, Japan’s ORIX Corporation, Abu Dhabi Investment Authority, Housing Development Finance Corporation, State Bank of India, Central Bank of India and Unit Trust of India.

According to media reports, IndusInd is also in talks to acquire Hyderabad-based microlender Bharat Financial Inclusion Ltd in a share swap.

In April 2015, IndusInd had acquired the diamond and jewellery financing business and related deposit portfolio of Royal Bank of Scotland N.V. in India. The acquired loan portfolio is approximately Rs 4100 crore.

In 2011, it had bought Deutsche Bank’s loss-making credit card business in India for an undisclosed sum.

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