CCI clears Sharekhan-BNP Paribas deal
The Competition Commission of India (CCI) has approved the acquisition of retail brokerage firm Sharekhan by French global financial services group BNP Paribas. Sharekhan will join BNP Paribas' Personal Investors division, which is a key player in retail brokerage, with over 1.7 million clients across Europe. The deal was announced by BNP Paribas in July 2015, and was pending approval by the CCI.
Sharekhan, which is India's 2nd largest online portal for "online trading, investments and stock marketing", was founded on 8 February 2000. ​Services like portfolio management, futures & options, trade execution in equities, insurance, commodities, distribution of mutual funds, and structured products are provided by Sharekhan. It is a member of the Bombay Stock Exchange, the National Stock Exchange and commodity exchanges NCDEX and MCX.
Banking outfit SSKI and Sharekhan's founder Shripal Morakhia is a man of diverse interests. He produced Bend it like Beckham and Monsoon Wedding; bought, facelifted and sold Amar Chitra Katha; and was in a joint sports venture with Sachin Tendulkar.
In 2000, Sharekhan managed to raise funding from private investors like HSBC Private Equity, Intel Capital and Carlyle. In April 2006, an investment was made by General Atlantic in the company by subscribing to equity, and also buying the equity holding of Carlyle. In 2007, the Morakhias ceased to be promoters of the company by selling their stake to Human Value Developers.
85% stake in Sharekhan was acquired for about Rs.470-480 crore by Citigroup's private equity arm Citigroup Venture Capital International (CVCI). CVCI was most likely to invest another Rs.200 crore into the company by getting a 'fresh issue of shares', which would constitute 15% of the equity capital. This deal made Sharkhan valuation reach a staggering Rs.650 crores.
Sharekhan has caught the eye of top private equity houses like Actis and Warburg Pincus, and Indus Bank who are in the race to acquire the company. Currently, Sharekhan is valued at Rs.3,000 crore which could make a deal with it, one of the largest in the stock broking industry. Sharekhan's majority owner Citi Venture Capital International, had hired Citi to find a buyer.
Sharekhan has not only covered the pan-India territory with over 1,529 outlets serving 950,000 customers across 450 cities but has created a global footprint through its UAE and Oman branches.
French banking major BNP Paribas made its newest acquisition in the name of Sharekhan, the Indian broking firm for close to Rs.2240 crore. Sharekhan will join BNP Paribas' personal investors division that deals with retail brokerage and digital banking service having as many as 1.2 million clients over Europe. The bank said that only regulatory approvals were left for the completion of the transaction.
