Lehman, others vie for Brics broking business

International brokerages, especially those which have made recent entry into the domestic market, are lining up to acquire the institutional broking business of the city-based Brics Securities. The list includes Lehman Brothers, Macquarie Securities, JP Morgan and Credit Suisse.

A senior executive of Brics Securities confirmed that the brokerage had received offers from global firms, which entered the country recently. But, he declined to divulge the names and added that the company was unlikely to accept any offer at the moment.

Brics is the latest to join the league of domestic brokerages that are attracting global interest. E* Trade, a US-based broking major, recently took controlling stake in IL&FS Investsmart.

France's BNP Paribas bought 33 per cent stake in Geojit Financial Services, Stanchart bought 49 per cent stake in UTI Securities, Citigroup Venture Capital bought into Sharekhan and BankMuscat took equity stake in Mangal Keshav.

Brics Securities, which was set up in October 2003 after the acquisition and rechristening of Birla Sun Life Securities, a joint venture between the Aditya Birla Group and the Sunlife Group of Canada, wants to attain a critical mass before taking a decision on stake sale. "We are not short of capital and our business is not capital intensive," the executive said.

Nayan Arun Jagjivan, owner of Brics Securities, made his fortunes by trading in international commodities before he bought Birla Sun Life Securities four years ago for a paltry Rs 10 crore.

He later turned Birla Sun Life Securities into Brics Securities. Some key employees hold a minority stake in the firm. The company did not respond to an email query on whether Lehman Brothers had approached the promoter for his institutional business.

The spokespersons for Macquarie and Lehman also declined to comment on the issue. Emails to Credit Suisse and JP Morgan too did not elicit any response.

The global players are attracted to the domestic market because of its growth potential. A Morgan Stanley research said the trading volume in the domestic market was expected to double to $3.2 trillion in 2010 from about $1.6 trillion currently. Morgan Stanley projects the domestic brokerage business to grow to $3.9 billion by 2015.

The late entrants to India "" Lehman Brothers, Macquarie Securities, JP Morgan and Credit Suisse "" are aggressively putting up their India strategy to grow their institutional broking business at a faster pace.

Wall Street biggies Goldman Sachs and Morgan Stanley separated from their Indian partners to pursue their independent strategy here.

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FOREIGN INTEREST

The list of International firms include Lehman Brothers, Macquarie Securities, JP Morgan and Credit Suisse.

Brics is the latest to join the league of domestic brokerages which are attracting global interest.

Brics Securities was created in October 2003 after the acquisition and rechristening of Birla Sun Life Securities, a joint venture between the Aditya Birla Group and the Sunlife Group of Canada.

The company did not respond to an email query on whether Lehman Brothers had approached the promoter for his institutional business.