The Aditya Birla Group's diversified conglomerate Aditya Birla Nuvo Ltd, today entered into an agreement to acquire a 56-per cent stake in retail broking firm Apollo Sindhoori Capital Investments Ltd for Rs198.8 crore.
After receiving regulatory clearances, Aditya Birla Nuvo plans to make an open offer.
"The strategic intent of this agreement is to position Aditya Birla Financial Services Group as a broad-based and integrated player in the financial services business," says Ajay Srinivasan, chief executive, financial services, Aditya Birla Group.
"We already have a strong presence across financial services verticals that include life insurance, fund management, distribution and wealth management, security based lending, insurance broking and private equity. Apollo Sindhoori Capital Investments offers us a well established platform with a capable team that will integrate well into our existing business and further strengthen our presence in the financial services space," he says.
The management of Apollo Sindhoori expects the Birla Group asociation to add substantial value the brokerage and has opted to retain a 10-per cent stake.
Suneeta Reddy, director, Apollo Sindhoori, says the deal is a "win-win situation for our employees and customers who will now have access to a wide array of products and services from one of India's household brand names.
Aditya Birla Financial Services expects to gain from Apollo Sindhoori's established 10-year platform to complemet its exisitng portfolio of financial services. The brokerage house has a strong distribution network of over 190 own and 570 franchisee branches, which will increase the reach and accessibility for the group's financial services products.
It also has trading facility in equity segment and derivative segment on the NSE and BSE and trading facility in the commodity segment, including bullion, oils, gaur seed, etc, through a subsidiary, depository participant services of NSDL and CDSL at major locations, online bidding facilities for IPOs and mutual fund distribution.
The Aditya Birla Group has a presence across various financial services verticals that include life insurance, fund management, distribution and wealth management, security-based lending, insurance broking and private equity. The consolidated revenues from these businesses crossed the $1-billion dollar mark in 2007-08, and in the first quarter of 2008-09, consolidated revenues of the financial services business crossing Rs982.8 crore for the first quarter, up from Rs535.9 crore in the first quarter of last year.