Motilal Oswal in talks for acquisition in North

Company has shortlisted two sharebroking firm as acquisition targets.

The stock broking house, Motilal Oswal Financial Services Ltd (MOFSL), had chalked out plans to expand its presence in northern India for which it initiated talks with a few North-based sharebroking firms for acquisition.

It has been learned by Business Standard through a market source close to the development at MOFSL, it shortlisted two sharebroking firm for a possible primary acquisition target.

The company had initiated the talks with the firms. According to the source, a firm is based in Delhi with branch network spread of 45-50 outlets in Northern India.

While the other firm is based out of Chandigarh, with 15 outlets in the north. However, the source refused to disclose the name of the target firms as it could hamper talks with the company.

The acquisition could be in the range of Rs 10 crore to Rs 30 crore, said the source in reference to the past acquisition the company made in Southern India.

The source said, the company has a strong presence in western and eastern part of the country, while recently it had made an attempt to strengthen its position in Southern India through acquisition of three broking firms. However, the company is yet to strengthen its presence in Northern India, and acquisition will be a step towards that direction.

The company has adopted a mix of expansion strategy in Northern India, where the company will spread its wing through organic means as it will expand its outlets in Northern India.

At the same time, to accelerate growth in North, the company is also banking on inorganic growth as it is eyeing two stockbroking firms for possible acquisitions.

MOFSL is the holding company of four subsidiaries "" Motilal Oswal Securities Ltd (MOSL), Motilal Oswal Commodities Brokers Pvt Ltd (MOCB), Motilal Oswal Venture Capital Advisors (MOVC) and Motilal Oswal Investment Advisors (MOIA).

The company generates 86 per cent of its revenues through brokerage business, while the other business contributes 19 per cent to the total revenue of the company that stood at Rs 379 crore for year-ended March 2007. The net profit stood at Rs 69.58 crore for the same period.

The company has 1,200 outlets across the country, across 377 cities and towns, with a customer base of 2.40 lakh. MOFSL is coming up with its maiden IPO in a price brand between Rs 725 per share to Rs 825 per equity share of Rs 5 each. In post-IPO, the promoters will hold 68 per cent stake in the company.