Icds Strikes Alliance With Sriyam Securities
Sluggishness in retail broking and dormant merchant banking activities have forced the Pai family-owned ICDS Securities Ltd to go for a strategic alliance with the Mumbai-based Sriyam Securities Ltd.
We will be moving out of the retail broking and merchant banking operations slowly as the Mumbai team takes over the broking arm of our company," says T .Mohandas Pai who heads the Pai family faction controlling ICDS and other group firms.
Talking to Business Standard, he said, "The National Stock Exchange (NSE) and other terminals will remain in our name, but the Chaturvedi-led Mumbai firm will operate it on a mainly profit sharing formula".
"Right now, there will neither be a change in the board of directors of ICDS Securities nor in the equity holding pattern in spite of the strategic alliance between the two ," he said.
However, he added, "we may consider equity participation by our partner and some board positions for them at a later stage if it is in the best interest of the company".
ICDS Securities Ltd has an equity base of Rs 2.48 crore.
The company is a member of NSE and Bangalore Stock Exchange, and also has a plastic card wing which works in tandem with the Stanchart card division for servicing cardholders through its vast network of offices.
D Chaturvedi and Co, an accountancy firm based in Mumbai, also happens to be the auditors of Reliance Industries Ltd and ICDS Ltd, the flagship of the Mohandas Pai-led family group having business worth Rs 800 crore.
Apart from being an accountancy firm, it has the mandate from investment behemoth Unit Trust of India and host of other institutions as clients for its wholesale broking division.
According to ICDS Securities sources, Sriyam Securities Ltd had approached the company with its plans to set up a branch of its wholesale brokering wing.
Since the same would have cost them Rs 1.5 crore, and ICDS Securities Ltd had its infrastructure ready but not much work on hand , sources said , " a profit sharing
formula was worked out to have an alliance".
Mohandas Pai maintained that the alliance would be watched by the partners for three months to decide the future course of action.
Inspite of this new arrangement , he added that there would be no retrenchment of staff.