UK financial co buys 50% in Inga Advisors

MUMBAI: UK-based £ 798 million ($1.5 billion) Collins Stewart Tullett (CST), a global financial services group listed on the LSE, is picking up a 50% stake in Mumbai-based Inga Advisors, a category-I merchant banker, through the foreign direct investment route.

The London-headquartered group, one of leading broking houses in the UK, will acquire nearly 35 lakh shares at Rs 23 per share, including a fresh issue of 18 lakh shares and purchase of 17 lakh shares held by existing shareholders of the Indian company.

Confirming the proposed foreign investment, GS Ganesh, president, Inga Advisors, told ET the company has received FIPB clearance though Sebi’s approval is still awaited. “Our partnership with Collins Stewart will help gain access to Europe’s huge midcap market in which the latter has strong presence,” said Mr Ganesh.

According to the FDI proposal filed with the FIPB, Inga Advisors will issue 18 lakh shares of Rs 10 at a premium of Rs 13 per share to CST’s stock broking arm Collins Stewart. The broking firm will purchase the remaining 16.96 lakh shares on repatriation basis from the Indian company’s promoters — Inga Management and Investment (4.85 lakh shares) and Fine Estates (12.11 lakh shares) — at a price of Rs 23 per share.

Incorporated in ‘99, Inga Advisors is a Sebi-registered, category-I merchant banker offering various financial services including non-fund based investment banking, advisory services for M&As, corporate advisory and merchant banking.

CST is the world’s second largest inter-dealer broker and also one of leading stock broking houses in the UK. The inter-dealer broker business is conducted under the Tullett Prebon brand. The stock broking business covers institutional and private client activities, market making, corporate finance and fund management.

The group has a network of about 3,000 staff in 29 countries covering all the major financial markets in the world. According to financial results available on the group’s website, total revenue rose to £798 million in ‘05 from £584 million in the previous year while profit after tax shot up £61.7 million from £20.7 million.

Collins Stewart already has a presence in India as it has invested in two companies — Prebon Yamane India and Parekh Forex — through group companies. Prebon Holdings BV holds 48% equity in Prebon Yamane India while Tullett Liberty BV has a 26% stake in Parekh Forex.