Mumbai-based financial services firm Pioneer Investcorp (Pinc) has closed its retail stock broking and wealth management businesses -- towards the end of the previous financial year, according to two people who have closely watched the development.
Fullerton Securities, owned by Temasek Holdings, has hired almost the entire team of 130-odd employees of the wealth management division of Pinc, said one of the two sources.
“Pinc had closed its retail broking and wealth management businesses around February-March this year. It wanted to focus on institutional broking and investment banking,” said the person, on condition of anonymity. “Fullerton was anyway looking to hire people. It roped in almost entire team of Pinc’s wealth management division. There was no monetary transaction. It was done based on mutual understanding between Pinc and Fullerton,” he added.
Sandip Raichura, who was heading Pinc’s wealth management division, had left the firm after the closure to set up Castanae Wealth Management. He took eight former employees of Pinc for his venture.
Pallav Sinha, president and chief executive officer of Fullerton Securities, could not be reached. An e-mail query sent to his executive assistant remained unanswered.
Gaurang Gandhi, managing director and majority shareholder of Pinc, could not be reached for a comment. There was no reply to an e-mail query sent to Rakesh Bhatia, Pinc’s CFO & head (compliance).
Pinc shares had gained 10.74 per cent to Rs 37.65 on the Bombay Stock Exchange (BSE) on Friday after media reports that it had closed its retail broking business and its wealth management unit has been merged with Fullerton Securities. The company’s stock has lost over 29 per cent in this year so far.
Falling cash market volume and increased share of low-margin options segment in the overall market volume have hurt profitability of Indian brokerages. This has resulted in some of the stock brokerages reducing staff and even closing a part of the business.
Shares of some of India’s leading domestic brokerages like Edelweiss, Motilal Oswal and Geojit BNP Paribas have lost over 40 per cent of their value in this year so far, compared with about 17.5 per cent drop in the BSE benchmark Sensex.
