Joined: 02/Sep/2006
Location: India
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Posted: 30/Nov/2007 at 12:04pm
Merrill Lynch is learnt to be investing $16-20 million in Bluechip Corporate Investment Centre, a Mumbai-headquartered financial products distribution house.
Though the amount of stake could not be ascertained, the transaction underscores the growing clout of the retail client base in India.
Bluechip is primarily into the distribution of mutual funds and insurance products, with a marginal slice of its estimated Rs 75 crore topline coming from distribution of fixed deposits and initial public offerings.
Bluechip has till now been a family-controlled enterprise, promoted by three brothers — J Rajagopalan, J Kannan and J Rajaram.
Market sources say that the brothers will use the funds to expand its distribution infrastructure and all-India connectivity.
Starting off with one office in Mumbai’s Fort area in 1989, it has now grown to 175 offices in 50 cities. The Merrill Lynch fund infusion will help it scale to 300 offices in 100 cities in the next one year, said market sources.
The company also plans to get into equity broking a year from now.
Merrill Lynch, the world’s largest brokerage, has seen its share value erode 38% this year, following a writedown of $7.9 billion in the third quarter for bad bets on risky subprime mortgages and related securities.
Across India, and notably in Mumbai, banks are using “correspondents”, or people who effectively serve as extensions of branches, in an effort to reach out to people who do not have access to banks and banking services.
One such bank, the Corporation Bank, is using the city’s famed dabbawallas, the men who ferry hot lunches to office goers across the city, as its correspondents.
These correspondents can disburse small loans, collect small deposits, and sell micro-insurance and mutual fund products.
The machine also produces a receipt for him. Union Bank has engaged the services of around 30 banking correspondents from Financial Information Network & Operations Ltd (Fino), a company set up by a consortium of banks in 2006, to find technological solutions that would help the spread of banking.
Union Bank has enrolled 10,000 vegetable vendors as customers and expects to reach another 90,000 by March 2008.
Apart from increasing reach, the correspondent model reduces transaction costs for banks.
Banks pay correspondents a nominal salary and a commission on top of this; the magnitude of the commission is a function of the number of transactions conducted, customers acquired or deposits mobilized by the correspondent.
Union Bank is currently focussing only on mobilizing deposits but plans to roll out credit facilities through correspondents.
The correspondent model is simple and calls for much less documentation. Rishi Gupta, chief financial officer, sales and marketing, Fino, says engaging banking correspondents is rapidly becoming an imperative for banks.
Apart from Union Bank, Fino is working closely with other public sector banks such as Punjab National Bank (PNB) in the north, and Indian Bank and Corporation Bank in the south. It is also working with ICICI Bank, the largest private sector bank in the country.
If PNB is looking at farmers, Corporation Bank is looking at taxi drivers and maids. The bank employsdabbawallas in Mumbai and postmen in Goa as correspondents.
Life can only be understood backwards—but it must be lived forwards
Prudential will be the majority shareholder with 61 percent interest, while DLF will own the remaining 39 percent. The asset management joint venture will be based in Mumbai and will provide a broad array of mutual fund and investment products, including domestic and eventually international mutual funds to Indian retail and institutional clients.
Life can only be understood backwards—but it must be lived forwards
"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
* ADR was popular when dollar was strong, now I feel IDR should become a reality within a year (if SEBI has cleared all rules & regulations).
* Cheap dollar should lure ICICIs, HDFCs, SBIs of the world to foray aggressive into rest of the world. It is very difficult to imagine but I feel one day (in this birth only), we should witness ICICI selling retail loans in USA/UK etc.
Joined: 02/Sep/2006
Location: India
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Posts: 9319
Posted: 05/Dec/2007 at 7:18am
ICICI group’s fund mobilisation target for ’08 for private equity investments in India stands at around $8 billion, which is half the total investment by all foreign institutional investors (FIIs) into the country this year. Of this, ICICI Venture alone is looking at raising around $5 billion with the remaining to be raised by ICICI Bank.
ICICI Venture ...launching a $2 billion real estate fund and $2 billion private equity fund.
Bigger players like Temasek, Warburg Pincus, CVC, New Bridge, Blackstone and Carlyle do not have an India-specific fund. Other players are also looking at major fund-raising plans for investments into India.
IDFC will hit the trail early next year. Says Shahzad Dalal, vice-chairman and MD, IL&FS Investment Managers, We will hit the market early next year to raise $750 million for a real estate fund.
Japanese major, Mizuho is also looking at launching a private equity fund based out of Japan for the Indian markets.
New Frontier Capital Management, a Japanese institution, is also looking at setting up a pan-Asia fund, but with a primary focus on India.
Others like Evolvence is also looking at raising a fund of funds for investments into India related funds. If sources are to be believed there will be a couple of more multi-billion fund of funds that are going to be raised. Others who are likely to hit the market next year include IDFC, UTI Ventures, and Blue River Fund among others.
Investors into Indian funds are looking at returns of 25% against around 15% in European funds.
Players like IDFC are looking at raising smaller fund next year. According to Luis Miranda, president & CEO, IDFC Private Equity, “Today it is extremely easy to raise money. But the question is what we do with the money. Valuations are relatively high as markets are at a high. Today there is more money coming into India than ever before. The question is can you make money,” he said.
World's largest bank Citigroup will open three new branches in India by February 2008 and plans to invest millions of dollars for its operations in the country over the next 12-18 months.
"The two new branches will be set up in Nanded and Akola in Maharashtra and the third will come up in Kurnool, Andhra Pradesh," Bird said here.
"If the Economy continues to grow at 9-10 per cent or so, I think the financial sector would have a growth rate of about three times that... We can expect the growth of 25-30 per cent for the financial sector." Chanda Kochhar, the bank's joint managing director and chief financial officer, said at the Reuters India Investment Summit in Mumbai.
UBS will increase its broking and investment banking team in India from 100 now, Manisha Girotra, managing director and chairperson for UBS India, said at the Reuters India Investment Summit on Thursday.
As well, it will add 1,000 people to its off shoring facility that services its US and European operations.
"Our challenge and our desire is to remain among the top three investment banks in India," Girotra said.
UBS, the world's largest wealth manager, is also awaiting regulatory approval to offer additional services including fixed income, wealth management and high-end retail banking
Life can only be understood backwards—but it must be lived forwards
Joined: 02/Sep/2006
Location: India
Online Status: Offline
Posts: 9319
Posted: 09/Dec/2007 at 7:37am
Karvy Stock Broking (KSBL), plans to float a Non-Banking Financial Company (NBFC) by March next year.
Last month, ICICI Bank's investment arm, ICICI Ventures and Baring Private Equity Asia (BPEA), had together invested nearly Rs 500 crore in KSBL, to acquire a nearly 25 per cent stake in the firm.
Karvy broking currently has 580 offices in the country and plans to add another 170 branches in the next one year, the source said.
The group also plans to expand globally and has zeroed in on Singapore and London for its foray.
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