Centrum in talks to buy out Future from two JVs

Centrum Capital, a financial services company, is in talks with Kishore Biyani's Future Capital Holdings (FCH) to buy out the latter's stake in their foreign exchange and wealth management joint ventures (JVs), executives familiar with the matter said.

Future Capital owns 50.1 per cent stake each in FCH CentrumDirect and FCH Centrum Wealth Managers, which it had bought in March 2008 for Rs 100 crore.

"Future Capital wants to go solo in forex and wealth management under V Vaidyanathan," said an executive. In August, Future Capital had appointed former ICICI Prudential Life Insurance chief, Vaidyanathan, as vice-chairman and managing director of the company, with the aim of making it a Rs 8,500-crore financial services giant in the next couple of years.

Earlier, there were media reports suggesting talks between Centrum and Future Capital regarding the future of their two JVs, but it was not clear who would buy whom.

When asked, Kishore Biyani, chairman of Future Capital Holdings, in a text message said FCH was not buying out Centrum's stake in the JV. When asked if Future Capital would start a stock broking and wealth management business on its own, he said: "Nothing is decided or being decided. It is status quo at the moment."

Expansion plan
Centrum Group is also planning to raise Rs 500 crore in the next two to three months to expand its retail financial services and non-banking financial service businesses, said Rajnish Bahl, brought in as MD and CEO of Centrum Group's retail financial services. The Mumbai-based group aims to raise this amount through qualified institutional placement or a private investment in public equity method in Centrum Capital or a private equity deal in Centrum Financial Services.

Apart from Bahl, some more officials from HSBC are joining Centrum's retail financial services business. Centrum has also hired G Chokkalingam as executive director and chief investment officer of its wealth management business. Prior to this, he was director and head of research & strategy at Barclays Wealth India.

"We are in advanced talks to hire one of the top four global consultancy firms to help us in framing strategy for the retail financial services business, which may eventually result in converting it into a bank," said Rajendra Naik, executive director of Centrum Capital.

Centrum's retail financial services business includes foreign exchange, wealth management & retail broking, non-banking finance and international business. The group's plan is to increase its distribution presence from 45 cities at present to 100 cities in the next three years.