Sharekhan to raise funds for expansion

Sharekhan, the retail broking arm of Mumbai-based financial services group SSKI, is raising resources to pursue its plans for aggressive expansion. The company has held discussions with investment banks for raising resources, which may be through an initial public offering (IPO), private placement, debt or a combination of all of these, its promoter Shripal Morakhia, said.

"I can tell you that I'm not selling my stake in the company. We are trying to raise resources for our expansion plan," Morakhia said. The fund will be raised through a fresh issue of shares, which will result in a dilution of stakes of all the existing shareholders.

The Morakhia family is the single largest shareholder in the company. General Atlantic invested about Rs 144 crore ($31 million) in April last year in the company through a combination of primary investment in the company and secondary investment through buying out the entire shareholding of First Carlyle Ventures. The other investors in the retail and online brokerage outfit are Intel Capital and a group of funds advised by HSBC Pvt Equity India.

Sharekhan, which used the proceeds from the sales of equity last year for strategic initiatives, is looking at expanding its presence through organic growth. "We believe there is enough scope to expand our business organically," he said, ruling out acquisitions of other domestic retail broking firms.

The company is among the top five retail brokerage outfits in the country with over 100 branches across 150 cities. "We have four major shareholders and 3,300 employees. We also have a strong management team. Any decision taken regarding the mode of fund raising, will be only after taking all the stakeholders into confidence," Morakhia said.

SSKI, the institutional brokerage outfit of the group, however, has no fund raising plans, he said.