Hemendra Kothari won't sell DSPML stake to BankAm

Will hold on to his 10% as long as he is comfortable with the integrated entity.

Hemendra Kothari, DSP Merrill Lynch Chairman, will hold on to his 10 per cent stake in the company which has been taken over by Bank of America.

Sources close to Kothari said he will retain his stake as long as he is comfortable with the integrated entity. In any case, he is no hurry to take a decision as the restructuring exercise will take a while.

“DSP Merrill Lynch will re-mould itself, according to the business plan of BoA. This is expected to be completed after concluding the acquisition by the end of the first quarter 2009,” said a top executive.

The net worth of DSP Merrill Lynch, which has about 600 employees in India, was around Rs 2,700 crore for the financial year ended March 2008. The company's profit after tax was Rs 1,024 crore.

New York-based Merrill Lynch, which is the third largest securities firm in the US, holds a 90 per cent stake in DSP Merrill Lynch. Over the past weekend, Merrill Lynch agreed to be bought by BoA in an all-stock transaction for $50 billion.

BoA is yet to intimate DSP Merrill Lynch's employees about the discussions in New York about the modalities of the deal.

The employees, however, are keeping their options open for new jobs in case of any overlapping. Debt management is one such area. A few employees at Merrill Lynch confirmed their concern for possible job cuts once BoA commences its operations in India.

However, it’s work as usual at the mutual fund business of DSP Merrill Lynch. The company yesterday declared that it will now be renamed DSP BlackRock Mutual Fund is in line with the realignment of Merrill Lynch's asset management business in 2006, when it was combined with BlackRock. Under this realignment, Merrill Lynch was combined with BlackRock (with assets of $1.4 trillion).

With the global rearrangement of Merrill Lynch's asset management business, the 40 per cent stake held by DSP Merrill Lynch in DSP Merrill Lynch Fund Managers will be transferred to BlackRock.

The balance 60 per cent will be held by the DSP Group, promoted by Hemendra Kothari, through its investment companies.