Ex-Citi CEO Pandit to buy stake in JM Financial
Shares in JM Financial Ltd rose as much as 10% at the pre-open today after the company said yesterday former Citigroup chief executive Vikram Pandit was buying a stake in the Indian financial services company.business Updated: May 17, 2013 13:48 IST
Shares in JM Financial Ltd rose as much as 10% at the pre-open on Friday after the company said on Thursday former Citigroup chief executive Vikram Pandit was buying a stake in the Indian financial services company.
Vikram Pandit will now spearhead Nimesh Kampani-led JM Financial's proposed banking venture and make a strategic investment in the financial services group.
India-origin Pandit will join hands once again with his business partner Hari Aiyar to buy 3% stake in JM Financial for Rs. 45 crore.
Pandit, Aiyar and Aparna Murthy Aiyar would together buy 2.32 crore warrants at a price of Rs. 19.50 per piece, aggregating to Rs. 45 crore.
JM Financial will issue over 1.16 crore warrants worth about Rs. 22.6 crore to Pandit alone.
Pandit, who had an unceremonious exit from Citigroup late last year, also plans to make investments in JM Financial's NBFC. He will also set up a $100-million distressed asset fund along with JM Financial.
"I continue to believe in the long-term growth prospects of India," Pandit said in a statement issued by JM Financial.
"I have known Nimesh and JM Financial for over two decades and believe that, given the opportunity, JM Financial can provide the banking and financial services that the country needs," he added.
JM Financial will nominate Pandit as the non-executive chairman of its proposed banking venture in which he and Hari Aiyar would have the right to purchase shares up to the amount prescribed by RBI.
In the board meeting held on Thursday, JM Financial decided to give $100 million to global funds managed by a firm led by Pandit.
He will be nominated as the non-executive chairman of the NBFC also. It decided to apply for a bank licence as well.
Kampani, the chairman of JM Financial Group, said: "We are very excited to have Vikram as a strategic investor."
He said association with Pandit will create strong domestic financial services businesses with global reach.
(With PTI and Reuters inputs)