Ambit bid to enter broking hits HDFC-CBoP merger hurdle

The proposed three-way venture between the Ashok Wadhwa-promoted Ambit group, Web18 of the TV18 group and Centurion Bank of Punjab (CBoP) for foraying into the stock broking business is in a limbo after the merger between HDFC Bank and CBoP last month.

Official sources have confirmed that the broking venture is unlikely to take off. "We have two different legal entities. We have the parent company Ambit Capital, which will be a joint venture between the three partners and there is a separate legal entity which will support and growing the retail business," Wadhwa, partner and CEO, Ambit Corporate Finance told a private television channel.

HDFC Bank acquired Centurion Bank of Punjab in an all-stock deal. The share swap ratio was 1:29 - one HDFC Bank share for every 29 shares of CBoP. Sources said the three parties had signed the shareholders agreement, but were yet to draw the roadmap to kickstart the new business.

In December 2006, Ambit, Web 18 and Centurion Bank of Punjab had entered into a 40:40:20 venture. The board o the new entity was to be chaired by Rana Talwar, the chairman of CBoP, and have a proportionate representation from the three stakeholders. Talwar was to act as an independent director.

When contacted, a senior CBoP executive said, "As of now, we have not made any investments. The HDFC bank board will review this venture." The executives of Ambit and Web18 could not be reached for comments.

Amarchand Mangaldas were the legal advisors to the joint venture. Ambit had roped in Nilesh Shah from Edelweiss Securities last year to spearhead its broking business called Ambit Capital.