Hinduja TMT (HTMT) has decided to close down its equity trading business with effect from April 1.
The company will also be merging the special purpose vehicle of the group, Sarthak Mercantile, which held equity stakes in some of HTMT's existing subsidiaries, with itself.
The entire restructuring is aimed at focussing on the core business of information technology and to get out of high risk speculative equity trading, a company release here said.
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The restructuring of businesses is in line with the recommendation of consultancy firm Accenture.
According to company sources, as a result of the winding up of the trading division, assets of around Rs 20 crore from the division would be used for further expansion of its infotech businesses.
The company has also surrendered its non-banking finance company license to Reserve Bank of India as a first step towards phasing out the company's finance activities.
Accenture had suggested that the equity trading business should be removed from the company and that a simpler structure for HTMT with intermediate layers of 100 per cent as opposed to 51 per cent subsidiaries would impart greater transparency to the structure.
As a result of the merger of Sarthak Mercantile with the company, Aasia Industrial Technologies, which controls the media subsidiaries of the group, and In2 Cable India, would become 100 per cent subsidiaries of the company from the current 51 per cent and 90 per cent subsidiaries, respectively.
The equity capital of HTMT would now go up by around Rs 5 crore from Rs 38.58 crore as a result of the merger of Sarthak Mercantile. The swap ratio has been fixed at 1 share of HTMT for every four shares of Sarthak Mercantile as against an earlier decided ratio of 10:21.