Standard Chartered Bank on Thursday took the first step to enter the stock-broking business by acquiring a 49 per cent stake in leading brokerage house UTI Securities Ltd (USL) from Securities Trading Corporation of India (STCI) for Rs 147 crore.
This deal put the valuation of USL, which STCI bought at Rs 265 crore last year, at Rs 300 crore. STCI, a leading primary broker in government securities, had bought a 100 per cent stake in USL from the Administrator of the Specified Undertaking of the Unit Trust of India.
The parties have provided for necessary options to raise Standard Chartered’s stake in stages to 100 per cent by 2010, subject to necessary regulatory approvals.
Jaspal Bindra, director, Standard Chartered Bank, said: “This investment is ground-breaking for the group as it signals its entry into securities broking and I am glad it commences with India.”
Sonali Sinha of Ernst & Young, which advised STCI, said USL could now offer complementary products such as savings account and demat services.