Millennium India to up stake in SMC

Millennium India Acquisition Company (MIAC), a US-based company, is likely to up its stake in Delhi-based brokerage outfit SMC Group by another 7 to 8 per cent through a new entity.

The company, which had earlier picked up 14.9 per cent stake for $40 million in the brokerage, would invest another $18 million to acquire the stake, according to sources close to the development. This is the first investment in India by a blank cheque company, which is typically a shell company having little or no employees, physical assets and no products, with a business plan to either merge or acquire unidentified companies.

Singhvi Advisors and Step Two Corporation are the advisors for the deal.

The $18 million required to acquire the additional stake would be funded by a different entity as Millennium India cannot buy more than 15 per cent stake in SMC, listed on the Delhi Stock Exchange, as anything over would require the company to go for an open offer, the sources said.

Subhash Chand Aggarwal, founder and chairman of SMC Group, said: "The funding will be used to expand the network further and create greater value for our customers through advanced technology. Millennium India will bring a wealth of knowledge through its international experience. Financial partnership with such a renowned international fund and extra resources will assist us in achieving faster growth. The funds raised will be deployed for faster growth, both organic and inorganic, and working capital requirements."

"SMC is a fast growing company in India with a long-term strategy, established presence and significant expansion potential," said Jacob Cherian, president and CEO of Millennium India.

We look forward to working with the dedicated and professional team of SMC to help the company accelerate its growth through access to capital provided by this transaction," said Jacob Cherian, president and CEO of Millennium India.

The SMC Group is a full-fledged financial services firm into institutional and retail brokerage, equity and commodity research, merchant banking and custodial services etc.