The US-based brokerage and investment bank Merrill Lynch, which recently hiked its stake in India Infoline to 14.10 per cent, is learnt to have initiated talks with the latter for acquiring a significant stake in its subsidiary"�India Infoline Distribution Co Ltd (IILD). | |
| Sources close to the development said Merrill Lynch is likely to pick up upto 26 per cent in the distribution business of India Infoline for over Rs 150 crore. |
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| Though R Venkatraman, director, India Infoline, denied any such talks with Merrill Lynch. A Merrill Lynch official declined to comment. |
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| The New York-based bank with about $1.6 trillion of assets under management, plans to enter into the mortgage business, and for this new line of business the company is planning a tie-up with India Infoline. |
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| Market players said such a move by Merrill Lynch would create tremendous synergies with India Infoline as it has a wide retail network of over 200 branches. In December 2006, India Infoline sold its stake in the subsidiary Khambhat Investment & Trading Co Pvt Ltd, a non-banking finance company, to Merrill Lynch. |
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| IILD, apart from the distribution of financial products such as mutual funds, IPOs and fixed deposits, also distributes mortgages and loan products. |
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| Merrill is among several foreign players, which are aggressively expanding in India. The French banking major BNP Paribas recently picked up 33.35 per cent stake in Kochi-based brokerage Geojit Financial Services. |
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| The bank also has plans to enter into asset financing and housing finance. Similarly, leading global online brokerage E-Trade Financial acquired a controlling stake in IL&FS Investsmart last year. |
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| Merrill is vying with Morgan Stanley, Goldman, Lehman Brothers, UBS AG, Credit Suisse and other private banks to manage wealth created in India. |
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| The bank has been expanding its private banking business since it increased its stake in DSP Financial Consultants to 90 percent for which it paid Hemendra Kothari $500 million. |
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| Last year, Goldman Sachs ended its 10 -year alliance with Kotak Mahindra while Morgan Stanley ended its joint venture with Nimesh Kampani by paying $425 million to buy out its joint venture with JM Financial to build its own business in India. |
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