JP Morgan to form asset reconstruction business with Yes Bank, Bank of Baroda, Bank of India and Union Bank

JP Morgan is setting up an asset reconstruction company in India along with public sector banks Bank of India, Bank of Baroda, Union Bank of India and private sector bank Yes Bank. The group has applied to the Reserve Bank of India (RBI) for its approval. JP Morgan will act as the knowledge partner in the joint venture, which will have an initial capital of Rs. 100 crores. If and when the RBI’s approval is received, the four India banks will form a company in which JP Morgan will pick up a 27% equity stake. For this, it will have to get the permission of the Foreign Investment Promotion Board, since the investment will be treated as foreign direct investment. At present, the cap on FDI in asset reconstruction companies is at 49%.

Union Bank was earlier supposed to partner Standard Chartered Bank in the latter’s ARC set-up. However, due to delays, Union Bank has now switched over to the JP Morgan side of the business.

Read more in the Business Standard article.
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JP Morgan to set up asset reconstruction business in India

Pioneer Asset Management to acquire 51% stake in BoB Mutual Fund

Pioneer Global Asset Management, part of Italian banking group Unicredito, will pick up a 51% stake in BoB Asset Management Limited, a subsidiary of Bank of Baroda. Pioneer is re-entering the Indian mutual fund business after exiting in the early part of 2000’s. It was earlier present in India through the Kothari-Pioneer Mutual Fund.

Unicredito acquired the Pioneer Group in 2000 but due to differences with the local JV partner decided to exit the Indian markets.

BoB has signed a memorandum of understanding with Pioneer. Pioneer will acquire stake at premium and control the operations of the AMC as they will provide domain expertise. BoB will bring in local expertise and access to its wide distribution network of over 2700 branches and 29 mn customers. The Unicredito group will also explore the possibility to establishing investment banking and private equity presence in India.

Read more in the Business Standard article.

India Infoline, BoB enter e-broking deal

The Economic Times reports that Mumbai-based broking firm India Infoline (IIL) has entered into an alliance with Bank of Baroda (BoB) to offer e-broking services to the bank’s customers. The alliance aims to provide various products and services under wealth management, along with research and analysis services to the bank’s customers. The service has been named as ‘Baroda e-trading’. It includes multiple options to customers for trading in equity shares (online and off-line) on both exchanges, in the cash as well in derivatives segments. The tie-up will help IIL reach out to the large customer base of the bank in states like Gujarat and Maharashtra. IIL has a daily traded turnover of Rs. 1000 crores and annual traded turnover of about Rs. 250,000 crores. It has a client base of 200,000 and employee strength of over 12,000. Currently, it is earning revenues of about Rs. 1 crore daily.

Indiabulls founder Sameer Gehlaut picks up 25% in BAG Films

Indiabulls co-founder and chairman Sameer Gehlaut has invested in Delhi-based TV and film content company BAG Films. Gehlaut is buying around 25% stake in BAG Films for Rs. 262 mn ($5.7 mn). Gehlaut has been made a preferential allotment of up to 20.25 mn equity shares of Rs. 2 each at a price of Rs. 13 per share. It is now mandatory for Gehlaut to make an offer for a further 20% stake. A fully subscribed open offer would make Gehlaut BAG’s largest shareholder.

The promoters of BAG Films, Rajiv Shukla and Anuradha Prasad own about 37.5% on the expanded equity currently. According to Anuradha Prasad, MD of BAG Films, Gehlaut has come in as a pure financial investor. BAG also plans to invest about Rs. 160 mn in new media and the animation business. Recently, IDBI Bank and Bank of Baroda have picked up 10% each in BAG Films’ radio venture, BAG Infotainment.

For more, refer to the Indiantelevision.com article.

Setco acquires Haldex manufacturing facility in the US for around $5 mn

Clutch manufacturer Setco Automotive has acquired the US manufacturing facility of Haldex Brake Products Corporation for $4.9 mn (around Rs. 22-23 crores). The company has a presence in 14 countries and intends to set up operations in 30 countries in three years. Last year, around the same time, Setco had acquired the Lipe Clutch division of the Dana Corporation for Rs. 16 crores. The acquisition would be funded, 13 crores in part by internal accruals, and Rs. 9 crores by way of debt, provided by the New York branch of Bank of Baroda.

Setco has acquired the company through its overseas subsidiary Setco Automotive NA in the UK.

The company, formerly known as Gujarat Setco Clutch, has posted a net profit of Rs. 5 crores on a total income of Rs. 67 crores last year. Harish Sheth, currently the MD of the company, and his family are the promoters of the company and hold 65% stake. New Vernon Private Equity holds 14% and the rest is widely held by the public. Setco has been a supplier of clutches to all major Indian truck companies including Tata Motors, Eicher and Ashok Leyland.

Read the articles from Business Standard and The Economic Times.