Two Put In Bid For Peregrine Stake In Indian Arm

Two bids have been received for the 75 per cent stake held by the Hong Kong-based Peregrine Investment Holding in Peregrine Capital India. Senior officials of Price Waterhouse, the liquidator, will visit Mumbai early next week to verify bids.

The names of the bidders will be kept under wraps for some time, sources said. The remaining three shareholders Thermax, IL&FS and Hathway Investments would also have to evaluate their position and arrive at a decision on it soon, a source said.

The collapse of Hong Kong-based investment bank Peregrine has put other players in the Indian capital market on their toes. While some have indicated that they may try and get portions of assets of Peregrine Capital India, some say that they have to put their head down and wait for the storm to cool down.

 

A senior official with a foreign brokerage said: The business will certainly be affected as most of our volumes are driven by FII inflows. We have to put our head down and wait for the storm to get over, he said.

Another foreign brokerage official indicated that it is an opportunity for those who do not have significant exposures in Asia. While competition is getting eliminated steadily, we feel that we can consolidate our position in the Indian market. The collapse of Peregrine has eliminated a profitable business in India which was a significant player in stockbroking, he said.

The 75 per cent stake of the holding company will have to be sold off. According to Peregrine India MD Shankar Dey, it is too early to predict who would be the buyer.

Dey also clarified that the Indian venture is well capitalised with a networth of Rs 75 crore. It is a profitable venture. We have virtually no debt on our books. We are a cash rich company and we do not need any credit lines from banks at this stage, he added.

He said they decided to scale down the business when talks between the Zurich-based group broke up. We informed Sebi and stock exchanges that we would like to scale down our operations. It is important to understand that it means we will continue with the business on hand and execute deals that we already possess. However, trading volumes will be much lower than normal, Dey added.

Peregrine Capital India Private Ltd has a subsidiary called Peregrine Securities India which has BSE as well as NSE membership.

As on March 31, 1997, the balance sheet of Peregrine Securities reveals that it made losses worth Rs 2.9 crore.