Chainrise To Pick Up 75% Stake In Llyods Securities

The Hong Kong-based Chainrise group, an NRI-owned conglomerate which is engaged in the textile and investment banking business, is set to infuse a capital of Rs 19 crore in Lloyds Securities, the broking arm of Lloyds Finance and pick up a 75 per cent stake.

This will boost the equity capital of Lloyds Securities from Rs 6 crore to Rs 25 crore. The company has already filed an application to form a joint venture company with the Hong Kong-based NRI and is expected to receive clearance from Foreign Investment Promotions Board by March. The proposal requests that the NRI firm be allowed to pick up 75 per cent of equity while Lloyds group will hold the remaining 25 per cent stake.

 

We were looking forward to taking up a capital restructuring exercise in order to strengthen the capital base of the company. This will be done with the NRI company infusing the capital, said G C Garg, managing director, Lloyds Finance, which is a promoter of Lloyds Securities.

At present, Mukesh Gupta, promoter of Lloyds Finance holds 51 per cent and Lloyds Finance holds the remaining 49 per cent stake in the Lloyds Securities. It is felt in the market that Sanjay Agarwal, the chief executive officer of Lloyds Securities will pick up the 25 per cent stake from Lloyds Finance.

With the capital market losing its sheen as more number of brokers are now surrendering their cards or selling them off and thus the shares of the Lloyds Securities will be sold to the new equity holder at par value, said market sources.

Sources said the joint venture with the NRI firm will serve twin purpose for the Lloyds group - besides strengthening the capital base of the Lloyds Securities, it will also enable Mukesh Shah to focus on its core areas of operation - steel sector. Mukesh Gupta might their pull out of the company or hold a minority stake in the company, said sources.

With the new partner taking stake in the company its core business will continue to specialise in broking business only, said Garg.