Citi, TPG bid for 40% Sharekhan stake

Private equity fund Texas Pacific Group (TPG) and global financial services major Citigroup have put in their bids to acquire nearly 40 per cent stake held by the promoters in Sharekhan. The bids peg the valuation of the retail brokerage firm at Rs 600-650 crore, sources said.

The bidders were also open, the sources said, to acquiring the non-promoter holding. The employees, who hold over 15 per cent stake, may sell their stake as well.

Intel Capital, General Atlantic Pacific and some funds advised by HSBC Private Equity hold 45 per cent in the company, the sources added.

Shripal Morakhia, the promoter of Sharekhan, said 19 companies had shown interest in acquiring a stake in the company.

"Nothing is going to happen in the short-term. The sale would have to go through several processes such as placing of bids, due diligence among others," Morakhia said.

"The company needs Rs 200-300 crore for its capital requirement. This is the amount we are looking at," he said.

On whether other investors would sell their stakes, Morakhia said: "If they are looking for an exit and if buyers are willing, we will not come in the way."

Citigroup has been looking to enter the retail brokerage business in India. Other MNCs such as ABN-Amro and BNP Paribas have already forayed into retail broking. While ABN-Amro set up its own business, BNP Paribas picked up 33 per cent stake in the Kochi-based Geojit Financial Services.

Sharekhan is one of the top five retail brokerages with 120 branches and 3,300 employees. The brokerage firm, which plans to increase its branches to 500 in two years, may get into distribution of insurance and mutual fund products.