Merrill Lynch Raises Stake In Dsp Financial To 40%

Speaking to Business Standard, Shitin Desai, vice chairman and managing director of DSP, said: "The conversion is a part of the original deal signed between the two partners which was due this September."

The increase in stake takes effect on conversion of warrants for 15 lakh equity shares issued to Merrill Lynch on March 27, 1995 into 15 lakh equity shares of Rs 10 each at a premium of Rs 238 per share. Consequently, the company's paid-up capital has gone up from Rs 8.5 crore to Rs 10 crore with Merrill Lynch holding upto Rs 40 per cent.

The company has informed the Bombay Stock Exchange about the recent board meeting and the developments thereafter. The company will apply separately for listing these 15 lakh shares on the bourse.

 

The option to convert warrants into shares and increase the holding is seen as an important development as it is an indication of the level of seriousness shown by the foreign partners in the Indian venture. Merrill Lynch is the first global equity player to have a tieup of this form. Goldman Sachs have about 28 per cent stake in Kotak Securities with an option to raise it upto 40 per cent.

The DSP Financial Consultants stock is a very thinly-traded stock on the BSE where it is listed. However, the company came out with a public issue in the early seventies and is listed since then. The exact holding of Indian promoters in the company could not be ascertained.

According to the BSE sources, there is hardly any floating stock of the company and figures starting from January 1996 indicate that the stock has been traded only six times till September 23 when it closed at Rs 475. The trading volumes have been extremely low and only 100 sharesof the stock were traded.

There was no trading in the stock yesterday. The 52-week high and low in the stock was Rs 750 and Rs 73.