StanChart acquires 100% in brokerage venture with STCI

Standard Chartered has increased its holding in Standard Chartered-STCI Capital Markets to 100 per cent by acquiring the remaining 25.1 per cent stake from its local partner, the Securities Trading Corporation of India (STCI). With this, the brokerage entity becomes a wholly-owned subsidiary of the foreign bank, which will soon be rebranded to reflect the new ownership.

The acquisition of the last tranche comes nearly three years after the initial acquisition was made. In August 2007, Standard Chartered entered into a strategic partnership with STCI by acquiring 49 per cent in UTI Securities, which was then renamed Standard Chartered-STCI Capital Markets. Thereafter, in December 2008, Standard Chartered exercised an option to raise its stake to 74.9 per cent.

While the complete acquisition cost Standard Chartered a little over Rs 300 crore, the foreign bank will infuse further capital to ramp up the broking services, including research and investment banking.

“Standard Chartered plans to provide an additional capital of $45 million to the company by January 2012. Of this, $20 million have been injected in October itself,” said Neeraj Swaroop, regional CEO (India & South Asia), Standard Chartered Bank.

The brokerage outfit currently offers retail and institutional broking, wealth management products and investment banking services.

A company release further added the bank had already made “several senior level recruitments to expand business and significantly ramp up capabilities in institutional equity research, sales and equity capital market”.

Ratnesh Kumar, who has earlier worked with Anand Rathi, Citigroup and CLSA, has been appointed the managing director and CEO of Standard Chartered-STCI Capital Markets. Rajesh Mayani and Dhiraj Agarwal have joined the India institutional equities team as managing director and director, respectively. Narayan Mulchandani would be based in Hong Kong and head India equity sales.

Incidentally, all the four moved from Anand Rathi recently. Prior to that, they had together moved from Citigroup to Anand Rathi.