Last year, it was the Morakhias of Sharekhan and SSKI who gave up their stock broking business. Now it turns out that the Kotichas of ASK Securities are also doing the same.
To pay Rs 139.14 crore for gaining complete control
MUMBAI: Last year, it was the Morakhias of Sharekhan and SSKI who gave up their stock broking business. Now it turns out that the Kotichas of ASK Securities are also doing the same.
On Monday, JM Financial announced that it has bought the entire stake of the Kotichas in their institutional broking and research joint venture, JM Financial ASK Securities.
The Rs 139.14 crore that has been paid for the 100% stake also includes the Koticha’s broking licence.
The Kotichas have held a broking licence with the Bombay Stock Exchange for over 30 years now, and one for the National Stock Exchange since the exchange was set up in 1994.
“We have a non-compete clause with JM Financial on the institutional broking business,” said Asit Koticha, managing director of ASK Group and the elder of the two brothers who run the business. The younger sibling is Sameer Koticha.
“We can get into retail broking, if our business and clients demands it,” he added, implying this was not a final adieu to broking as done by the Morakhias.
Middle of last year, Shripal Morakhia and family sold their retail broking arm Sharekhan to Citigroup, and the institutional broking and investment banking arm SSKI to IDFC. That sealed their exit from the financial services space.
The Kotichas, meanwhile, continue to operate in the space sans broking. Without ASK Securities, the Kotichas will run ASK Investment Managers, the group’s portfolio management business, and ASK Wealth Advisors, which is into financial advise and third-party distribution of financial products to high net worth individuals.
“In the next six months, the group also plans to foray into the mutual funds business, private equity and real estate, depending on when we get the required licences,” said Asit Koticha.
For Nimesh Kampani, chairman of JM Financial, the acquisition means getting back to business as usual. Early last year, JM Financial had sold its 49% equity stake in its institutional equity business to Morgan Stanley for $445 million (approx Rs 1,767 crore). Left with no institutional business, JM Financial acquired a 60% stake in ASK Securities in October 2007.
Raising this stake to 100% now seems like a natural extension of that.
Kampani said, “This acquisition is part of our on-going strategy to provide our clients the entire bouquet of financial services and to continue to strengthen the JM Financial brand as a leading financial services organisation. It is an important milestone for our group and we believe this acquisition will help integrate our capital markets business further.”
sanat_vallikappen@dnaindia.net
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