IDFC Securities to finalise buyer on Friday; Equirus among four in fray

IDFC Ltd will finalise the buyer for its broking arm on Friday, said people with the direct knowledge of the development. At least three bidders are in the fray to acquire IDFC Securities, which has substantial presence in the investment banking and institutional broking business. Meanwhile, Dharmesh Mehta, former managing director and chief executive officer of Axis Capital, has withdrawn his application.

The remaining bidders include Carnelian Capital, founded by Vikas Khemani who previously headed the institutional sales and investment banking business of Edelweiss; Equirus Capital, domestic broking and investment banking firm, InCred Finance, a firm focused on SME and consumer lending.

Sources say IDFC Securities have received bids in the range of Rs 1 billion and Rs 1.5 billion.

Any of the concerned parties couldn’t be reached immediately for a comment.

Mehta confirmed that he has withdrawn his bid for IDFC Securities. On Tuesday, Axis Bank in a statement said Mehta had submitted his resignation from Axis Capital to “pursue other interests.”

Industry players say the bidders more interested in IDFC Securities’ investment banking franchise.

In 2017, IDFC Securities had helped 10 companies mobilise Rs 52 billion of equity capital. This year, it has been associated with four deals worth Rs 7.33 billion, data compiled by Bloomberg shows.

“The outlook for equity capital raising in India is robust. IDFC Securities has a strong investment banking presence,” said one of the bidder.

Sources say the firm’s institutional broking license and clients will also be valuable.

“It is not easy obtaining licenses and setting up an institutional broking platform. IDFC Securities has a well-established broking and investment banking platform,” said a broking industry official.

Besides IDFC Securities, IDFC has also put on the block its mutual fund business IDFC Mutual Fund. The move comes ahead of the merger with Capital First. Sources say though IDFC MF had received suiters the deal failed through because of valuation mismatch.