Barings likely to ramp up stake in JRG Securities

Private equity investor Barings India Private Equity may become the single largest shareholder in JRG Securities as it plans to up its stake in the brokerage firm. Last week, Barings infused $35 million for 45 per cent stake into the Kerala-based firm.

Subsequently, Barings will be making a mandatory 20 per cent open offer sometime this month. If the open offer is successful, Barings could see its holding go up to 65 per cent. However, market analysts do not expect the open offer to be fully subscribed.

A source said that JRG Securities plans to raise more funds through preferential issue and warrants in the future, which could see the promoters stake coming down.The promoters Jiji Antony , Regi Jacob and Giby Mathew together hold 45 per cent in the company.

If Barings manages to have a majority stake in the company, this would be second instance where a private equity investor becomes the single largest shareholder in a brokerage house. Earlier Citigroup's private equity arm had picked up 85 per cent share in retail brokerage firm Sharekhan for Rs 470-480 crore.

"We will be making no more investments out of our current fund but our existing portfolio companies may get more money."said Munish Dayal, Partner, Baring Private Equity Partners India. Dayal recently moved to Barings from Citigroup. Barings has a long term outlook on its investments and remains committed for 10-12 years.

Of its current fund, it has thus far invested more than $100 million in 14 companies including Infrasoft Technologies, SIRO Clinpharm, ReaMetrix, Secova eServices, Maples and GI Terminal Technologies.