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India Infoline may exit 2nd Sri Lankan subsidiary

Sachin P Mampatta  |  Mumbai 

India Infoline Ltd (IIFL) is exploring the possibility of exiting its second Sri Lankan subsidiary, IIFL Capital Ceylon. This would be in addition to the planned exit from IIFL Securities Ceylon, announced on January 6.

"Discussions are on. The stake sale may be to the local partner in the country," said a source.

IIFL Capital Ceylon was set up to serve as a vehicle for services not offered by IIFL Securities Ceylon. This included investment banking and distribution services.

IIFL Capital Ceylon had reported a net loss of Rs 47.7 lakh for the financial year ended March 2013, according to IIFL's annual report.

IIFL had earlier announced the sale of its Sri Lankan broking company.

"IIFL has informed the BSE the company proposes to divest 76 per cent stake in its Sri Lankan subsidiary, IIFL Securities Ceylon (Private) Ltd, engaged in stock broking activities on the Colombo Stock Exchange to its Sri Lankan joint venture partner who is holding 24 per cent stake for a total consideration of Rs SL50 million (Rs 2.3 crore)," said the exchange announcement.

The company plans to complete the brokerage sale by the end of the current financial year. "Both parties have entered into an agreement and set the timeline of March 31, 2014 for the conclusion of the sale," the exchange announcement noted.

IIFL Securities Ceylon had a net loss of Rs 1.18 crore, according the same annual report. IIFL has a 76 per cent stake in both companies with a local partner holding the remainder of the equity stake.

The current talks are at a preliminary stage and may or may not result in a deal, said the source quoted above.

A spokesperson declined to comment.

IIFL has 28 subsidiaries in India and abroad, according to its annual report. Its other foreign subsidiaries include entities based out of Dubai, Hong Kong, the UK as well as the US.

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First Published: Wed, January 08 2014. 22:40 IST