Motilal Oswal gets Rs 125 crore US funds

Motilal Oswal today became the second brokerage to draw large investments from overseas funds. Exactly a week after Sharekhan attracted Rs 144 crore infusion, Motilal Oswal, one of the largest and oldest domestic broking firms, today drew in Rs 125 crore from two US-based venture funds.

"We will foray into investment banking services and private equity investments with the aim to further consolidate our position in the securities business. The funds raised will be used for various strategic initiatives, both organic and inorganic expansion and working capital requirements," CMD Motilal Oswal said.

The investment into the privately held brokerage has been made in the form of shares accounting for 9.29 per cent of the total equity base of the firm. The investment by New Vernon Private Equity and Bessemer Venture Partners has put the valuation of the firm at Rs 1,350 crore.

On April 12, Sharekhan, another prominent broking house, announced a combined investment and stake sale amounting to Rs 144 crore to the US-based private equity firm General Atlantic.

The long bull run in the Indian markets has led to tremendous growth for brokerages and stock-related firms, leading to increased interest from overseas firms eager to get a pie of the profit.

Industry sources claim that investment in the brokerage sector in the country is poised for further growth with increasing interest of retail investors.

Rajiv Sahney of New Vernon said, "We are looking out for a credible, well oriented, long-term partner in India and Motilal Oswal is one of the highest-calibre broking houses in the country."

Motilal Oswal, involved in equity research, derivatives, mutual fund distribution, portfolio management services and commodities, currently has nearly 4 per cent of the total market.