Citigroup Venture to buy Rs 400 cr PINC stake

Citigroup's private equity arm Citigroup Venture Capital International is close to acquiring an equity stake in Mumbai-based brokerage house PINC (Pioneer Investcorp) for about Rs 400 crore (Rs 4 billion) as deals in the broking industry continue the momentum into the new year.

Sources said Delhi-based Chryscapital and Sequoia are the other two private equity funds that are in the race for the stake.

The deal, which is likely to be announced this week, adds to the string of recent deals in the Indian stock broking industry. When contacted, a senior company executive confirmed that they were looking at private equity investments. But they declined to confirm any names, as the deal was not closed as yet.

If the deal goes through, this will be CVCI's third investment in a broking outfit and the first during this calendar year. Last year, CVCI bought a majority stake in retail brokerage Sharekhan for $174 million and another about 20 per cent stake in Anand Rathi Securities for $20 million.

PINC, a stock market-listed company, is promoted by the Gaurang Gandhi family. The promoters hold about 45 per cent stake in the company, employees hold about 15 per cent and the remaining equity is held by the public.

Sources close to the development said initially CVCI would be investing about Rs 170 crore (Rs 17 billion) in PINC and the remaining amount would come during the second round of funding. The total valuation of the company is about Rs 800 crore (Rs 8 billion).

The funds raised would be used for the company's expansion plans. It plans to expand its institutional and retail broking business besides foraying into the equity capital market and beefing up its investment banking activities.

The company recently roped in G Alankara from SSKI to head its institutional sales and Anil Verma from Bajaj Allianz to head of its direct insurance business.

Investment advisory is also going to be a strategic thrust area of growth for the company and its research head Sandeep Shenoy has been promoted to advise and manage the portfolios of HNIs and global hedge funds, according to sources.

PINC is expected to clock a profit of Rs 50 crore (Rs 500 million) this year and has around 200-odd employees.