Il & Fs Okays 3 Subsidiaries Merger

Infrastructure Leasing & Financial Services (IL&FS) board recently cleared the proposal to merge its three subsidiaries Investsmart, DebtonNet and IL&FS Merchant Bank with retrospective effect from January 1, 2002 and has applied to the Mumbai High Court for approval.

The move is expected to consolidate and synergise the activities of all the three arms, Hemang Raja, president and CEO, Investsmart India Ltd, said.

"The segregated business models are becoming volatile and integration of business is in vogue. The consolidated model will prop up the revenues of the merged entity," Raja said.

The merged entity will have Ramesh Bawa, as the executive director (currently Sr. vice president IL&FS) and Satish Chenoy as deputy managing director. The merged entity will mostly come into being by July end, Bawa said.

The merged entity is expected to make a profit of at least Rs 5 crore and revenues of Rs 30 crore in the current financial year as against break-even and a revenue of Rs 26 crore for the year ended March 2002, Bawa said.

Investsmart India Ltd (IIL) had been promoted to develop a Retail Broking Franchise, with a focus on providing Advisory Services to high networth individuals. The initial focus has been on technology, back office systems and training of sale personnel. IIL has positioned itself as a leading retail broking franchise, with a branch network in all the major metros of the country.

In order to harness technology to meet business objectives, IIL launched web-based trading facility for its retail customers. With imminent enactment of cyber legislation, IIL would be offering seamless trading and settlement services to its customers. The shareholders' consortium of IIL has been expanded with the introduction of ORIX Corporation, Japan and the K Raheja Group as strategic shareholders.

IL&FS Merchant Banking Services Ltd (IMBSL) became fully operational during the financial year 1999-2000 and currently provides the full range of merchant banking services to its clients, with a focus on fixed income, equity and loan syndication and placement of money market instruments.

DebtonNet was launched as a joint venture with the National Stock Exchange (NSE) recently sold off its 50 per cent stake to IL&FS for Rs 1 crore. The paid-up equity capital of the company was Rs 2 crore.