SMC to form joint venture with South african firm

New Delhi: Domestic brokerage house SMC Group said that South African financial giant Sanlam Group will invest Rs 215 crore in the company for setting up wealth and asset management businesses through two joint ventures.

Sanlam Investments, the investment arm of the South African group, would acquire about five per cent stake by way of warrants in the SMC Group for Rs 155 crore.

The stake sale values the SMC Group at an enterprise value of about Rs 31,000 crore.

'Sanlam would also invest Rs 30 crore each in the asset and wealth management businesses, while SMC would also put in the same amount in the two JV companies. The stake sale amount of Rs 155 crore and the investment of Rs 60 crore in the two JVs takes aggregate consideration of the deal to Rs 215 crore,' SMC Chairman S C Aggarwal told reporters.

SMC Group's customer base exceeds 400,000 and is growing at 10,000 new accounts per month, Aggarwal said and added, 'Following the JV, the Indian financial services space will see further transformation of SMC from our position as one of the largest securities brokerage houses into a well diversified company.'

The regulatory approvals needed for the twin businesses are on way to completion, after which the companies would launch their products.

'We are likely to get approval for the asset management business in next six to eight months. Our first product offering may be a liquid scheme, which includes a fixed maturity plan,' Aggarwal said.