A big chunk of stake in broking firm UTI Securities is up for sale. The seller is Securities Trading Corporation of India (STCI), which holds 100 per cent in the company. STCI has put 49 per cent on the block.
There is interest from several foreign broking houses in this semi-government undertaking. Citigroup, Macquarie Bank, Standard Chartered, Societe Generale and Kuwait-based Global Investment House are believed to be in the race, according to a report in Business Standard.
In April 2006, STCI bought 100 per cent stake in UTI Securities for Rs 265 crore last year from Specified Undertaking of UTI (SUUTI), which was the administrator. According to this deal, STCI has a minimum lock-in of three years for 51 per cent stake, which ends in 2008. It can however, hawk the rest any time. Interestingly, STCI prefers a foreign player as a strategic partner. UTI Securities started as an institutional brokerage firm. Now it has moved to retail broking too. It also has an online broking division - Usectrade.com.
Broking business has been a very active sector from the M&A and private equity point of view. Recently, BNP Paribas bought 33.35 per cent stake in Geojit Financial Services for Rs 207 crore. E*Trade and SAIF Partners are investors in IL&FS Investsmart. Citigroup Venture Capital International recently acquired 19.9 per cent stake in Mumbai-based Anand Rathi Securities. General Atlantic, Intel Capital and HSBC Private Equity are investors in Sharekhan. Motilal Oswal Financial Services, which had sold 9.48 per cent stake to New Vernon Private Equity Ltd and Bessemer Venture Partners last year, is going in for an IPO now.
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