SCB to buy UTI stake in PD venture

Standard Chartered Bank is buying out UTI Securities' 24 per cent stake in Standard Charted UTI Securities India, a primary dealership venture between the bank and UTI Securities.

Standard Chartered holds 76 per cent stake in SCUTI. Standard Chartered's wholly owned subsidiary Standard Chartered Investments and Loans will acquire the stake from Securities and Trading Corporation of India (STCI), which took over UTI Securities for Rs 265 crore in February.

Standard Chartered Investments and Loans is a category B non-banking finance company. Confirming the development, sources close to the development said the acquisition would happen at the book value of SCUTI.

The stake sale would place for at around Rs 17 crore, going by SCUTI's book value of nearly Rs 70 crore. UTI Securities invested Rs 13 crore for its 24 per cent stake in the company six years ago. Standard Chartered has received the permission from the Foreign Investment Promotion Board for this investment.

STCI, the largest primary dealer in the bond market, took over UTI Securities, from the Specified Undertaking of Unit Trust of India nearly 10 months ago.

Since the laws of the land do not permit one entity to hold two licenses for primary dealership, STCI decided to sell of its stake in SCUTI. STCI is the country's largest primary dealer.

SCUTI was incorporated six years ago. UTI Securities has been a financial investor while Standard Chartered has been managing the business of SCUTI. So, Standard Chartered's proposed acquisition of the remaining stake in SCUTI was only logical, sources said.