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Sunday, October 9, 2011

Carlyle picks up 9% in India Infoline

My colleague Sachin Mampatta co-authored this story, which first appeared in DNA Money edition on Thursday, October 6, 2011.

The Carlyle group, which manages Rs7.55 lakh crore worth assets globally, has picked up a 9% stake valued at Rs192 crore in brokerage and financial services firm India Infoline (IIFL).

The stake was picked up over the last few weeks from the open market, according to a Carlyle spokesperson. The private equity firm would get a seat on the board of the company, said a joint-note on the development.

“Carlyle becomes a key institutional shareholder in IIFL and will be invited to join IIFL’s board of directors to support its future development, subject to necessary approvals,” it said.

Talks of a stake sale to a foreign entity have been doing the rounds for over a year. IIFL chairman, Nirmal Jain, dismissed speculations of a total promoter sell-out, terming them “baseless”.

He said there was no change in the promoter shareholding. There have also been no discussions for any additional stake sale, although the Carlyle remains free to pick it from the open market, Jain said.

As per the current stock price, Carlyle’s 9% stake is worth Rs192.15 crore.

“We bought around 6.5% stake a few weeks ago and then increased it gradually to the current 9% levels,” said Devinjit Singh, managing director of The Carlyle Group.

IIFL said the acquisition would help it expand overseas.
“We hope to leverage our relationship with Carlyle to continuously grow and expand internationally,” said Jain.

The investment was made by Carlyle Mauritius Investment Advisors Ltd, a part of Carlyle Asia Partners, which has made investments including HDFC in India.

Carlyle has invested more than $2 billion (Rs10,000) in Asian financial services businesses.

The IIFL stock was up 1.95%, closing at Rs70.75 at the end of trade on Wednesday.

The Sensex, whose movements reflect the broader market trend, was down 0.46%, closing at 15792.41.

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