StanChart to pick up 49% in UTI Securities

The UK-headquartered Standard Chartered will acquire 49 per cent stake in UTI Securities for Rs 147 crore from Securities Trading Corporation of India (STCI).

Standard Chartered retains the option to up the stake to 100 per cent by 2010. STCI had paid Rs 265 crore for acquiring 100 per cent in UTI Securities last year from the Administrator of the Specified Undertaking of the Unit Trust of India.

"We have the intention to increase the stake and have an option to hike by 25.9 per cent up to 74.9 per cent in 2008 at a fixed price and then 100 per cent by 2010, "said Neeraj Swaroop,CEO-India,Standard Chartered Bank.

The total valuation in the final tranche is linked to the performance of UTI Securities, which would be between Rs 300 and Rs 350 crore.

"The name will be rebranded and it will reflect the new shareholding.We will be jointly appointing the new CEO for UTI Securities.It becomes a global organisation and our objective is to make UTI Securities a large player in the market where they operate and in the markets they want to operate," he added.

There will be three directors on the board from StanChart which includes Neeraj Swaroop, Murali M Natrajan, Head -Consumer Banking, India & Nepal and P R Somasundaram, Head - Strategic Initiatives,South Asia and Country Head Subsidiaries -India.

Standard Chartered has over 2 million customers now and through this joint venture, it would be able to offer an additional product to its customers, most of whom trade with other institutions.

"The partnership will enable us to broaden our product offering in wealth management and private banking within India, and the NRI product portfolio in our footprint countries," Swaroop added.