Merrill Lynch sells stake in Religare

NEW DELHI: Merrill Lynch has sold its nearly 5% stake in financial services company Religare Enterprises for an undisclosed sum, a spokesman for the New Delhi-based company said.

US-based Merrill, a badly-bruised Wall Street heavyweight that is being acquired by Bank of America (BoA), had bought a 5.56% stake in Religare as part of a pre-initial public offering (IPO) placement last year. Religare listed last November.

The one-year lock-in period expired last month, and Merrill Lynch has since sold its post-IPO stake of 4.97%. The buyers of the stake or the price at which it changed hands were not immediately known, although a Religare official, who asked not to be named, said the sale happened last week.

Based on Religare���s average stock price of Rs 299 last week, Merrill Lynch could have cashed out for
Rs 113.6 crore, generating a return of 87.5% in one year. Merrill had acquired 5.56% stake in Religare for Rs 60.6 crore last October through its wholly-owned subsidiary Indopark Holdings.

Merrill has been disposing off non-core assets world-wide, and is in the midst of a major restructuring following its purchase by BoA. A senior Religare executive told ET Merrill had been contemplating an exit for quite some time. Despite the stock market crash, the scrip is trading much above its IPO issue price of Rs 185. The stock had shot up after listing to touch Rs 729 on the NSE.

After the stock market crash, it has come down. The promoters of Religare, Malvinder and Shivinder Singh have been buying shares through the creeping acquisition route. They currently hold 54% of the company.