ICICI Venture pays Rs500cr for 25% Karvy stake

ICICI Venture, a subsidiary of ICICI Bank, is acquiring a 25% stake in Hyderabad-based Karvy Stock Broking (KSBL) for Rs 500 crore.

The private equity firm, with funds under management  in excess of $2 billion, is acquiring the existing 20% stake held by Pacific Century Group and also an additional 5% equity by way of fresh investment through one of its funds and an affiliate of Baring Private Equity Asia (BPEA), a pan-Asian private equity firm with over $2 billion in capital under advisory.

MAPE Advisory Group opted as the exclusive financial adviser to Karvy and its shareholders in this regard.

KSBL, a member of the National Stock Exchange and the Bombay Stock Exchange, has over 580 offices covering over 350 cities and towns in the country, including offices at Dubai and New York. Besides offering broking services to 3.5 lakh retail investors, KSBL has a private client desk to cater to high networth individuals and corporates and an institutional desk to service domestic and foreign financial institutions. It does an average daily turnover of Rs 1,500 crore.

"The potential of the financial services sector needs little emphasis to comment. We believe that by investing in Karvy we have picked a player that has the right elements to address the tremendous opportunity," ICICI Venture managing director and chief executive officer, Renuka Ramnath, said today.

KSBL chairman C Parthasarathy said the company's relation with ICICI Venture and BPEA "will surely help us to further strengthen our position."