Spice Group set to enter financial services

The B K Modi-promoted Spice Group is diversifying into financial services with plans to start businesses which will deal with asset reconstruction, remittances, over-the-counter exchange and fixed income products.

The over 30-year-old business group, which has primarily focused on technology-led ventures, had divested its stake in mobile services company Spice Communications last year for Rs 2,700 crore.

Armed with the cash, the 60-year-old Modi — who has built and exited at least half a dozen businesses, including the first one Modi Xerox — now wishes to build a new venture for his next generation.

Modi’s 26-year-old daughter Divya, who has studied finance, would head the financial services business as executive director, while her father would oversee it as the chairperson.

“The younger generation has their own vision; it is easy for me to get into their business than for them to pursue my dreams,” said the serial entrepreneur, who himself departed from the family business of tyre and textiles three decades ago. At the time, Modi started his own business by first setting up two shops of photocopying in the country with Xerox machines with less than Rs 1 crore.

Divya Modi owns 24 per cent stake in the group, which currently has an asset value of about $1.5 billion. Her 34-year-old brother Dilip, with an education background in technology and management fields, heads the telecommunication venture of mobile handsets, value-added services and handset retailing.

Dilip owns 25 per cent stake in the group, while the rest 51 per cent is owned by B K Modi. The group is now looking for a $1-billion valuation in financial services business in the next three to five years.

“We are ready to bring in a partner, raise equity or leverage our balance sheet to build the business,” said the group chairman. It has put Rs 500 crore as seed money for the financial services business and it is roping in a Singapore-based firm as a partner for the asset reconstruction business.

The financial services space is a rapidly growing one in India. The country received $45 billion in foreign currency remittances from non-resident Indians in 2008, the highest in the world.