Citigroup VC may invest $15 mn in AnandRathi

Citigroup Venture Capital (CVC) is in talks to acquire 10-15 per cent stake in AnandRathi Securities, the Mumbai-based securities and wealth management firm, for nearly Rs 70 crore ($15 million). This investment in the Rs 150 crore firm is a precursor to the proposed public issue of brokerage firm next financial year.

CVC is in the fray along with couple of more private equity funds and the deal is expected to closed within the end of the current fiscal. While CVC officials were not available for comment, Anand Rathi, chairman, said the company was talking to various funds and exploring various options will not be able to comment until the deal is signed.

AnandRathi is expected to divest around 10 per cent stake for this investment, the first private equity funding in its 12-year history.

The company offers the entire gamut of financial and advisory services including wealth management, investment banking, corporate advisory, brokerage & distribution of equities, commodities, mutual funds and insurance. Besides having a pan-India presence with 300 offices, it has international presence through offices in Dubai and Bangkok.

According to industry information, AnandRathi is set to expand at a faster clip preparing the platform its IPO. "After Indiabulls went public, this will be other notable firm in this space to go public," sources in the industry said.

This firm also runs a Rs 150 crore realty fund focusing on partnering with developers in tier II cities to cater to the growing demand for quality residential space in these cities and also earmark some investments in rental income yielding office properties.

The target is to raise a corpus of Rs 500 crore. The fund is targeting gateway cities such as Coimbatore, Mysore, Pune, Ludhiana, Kanpur and Agra among other tier-II centres.

AnandRathi, given the ongoing interest in global markets for Indian real estate, is also planning to launch an overseas $75 million fund. "This will consolidate our initiative to provide a fund based investment platform to global investors who are keen to diversify in Indian real estate assets," the company said.