Indiabulls Financial Services, one of the country`s fastest growing financial services companies, is in negotiation with a clutch of strategic investors to sell a minority stake in its 100% broking subsidiary, Indiabulls Securities, reports Economic Times.
Deutsche Bank and Standard Chartered, two of the country`s leading foreign banks, have already submitted bids to buy up to 26% in the firm.
Soaring equity markets and rapidly increasing growth prospects have made many domestic brokerages turn to outside sources of funding such as financial or strategic investors. Foreign funds and companies are also increasingly willing to partner with Indian brokerages to get an exposure to the fast-growing but intensely competitive domestic brokerage business.
Early this year, General Atlantic, a leading US private equity fund, acquired 14.3% in Sharekhan, a retail brokerage, for about Rs 1400 million, valuing the firm at about Rs 9500 million. New Vernon Capital and Bessemer Venture Partners together acquired about 9.3% in Motilal Oswal Securities for about Rs 1250 million, valuing the firm at about Rs 12,500 million.
In the case of Indiabulls, the two banks are believed to have valued the broking arm at about Rs 30 billion. The firm has a market cap of about Rs 64.16 billion.
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