ICICI Venture, Baring PE set to buy 32% in Karvy for Rs 500 cr

Leading private equity investors ICICI Venture and Baring Private Equity Asia are set to invest around Rs 500 crore to pick up around 32% stake in Karvy Stock Broking Limited (KRBL), an arm of the Hyderabad-based Karvy Group.

The deal puts the enterprise value of the securities firm at around Rs 1,500-1,600 crore. MAPE Advisory Group advised Karvy on the transaction. The valuation, however, is lower than that of other established stock broking and investment banking players like Edelweiss Capital, Indiabulls, Motilal Oswal Securities and India Infoline which took PE route in the past and raised funds from the primary market.

ICICI Venture and Baring Private Equity are buying the 20% equity held by existing investor Pacific Century Group (PCG), while an additional 12% stake will be offered to them in the form of fresh equity, according to sources. The Hong Kong-based PCG had acquired the stake for Rs 83 crore in 2005, which had valued Karvy at around Rs 415 crore then.

Read more in The Economic Times article.

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ICICI Ven buys Karvy stake:Sources

ICICI Ven buys Karvy stake:Sources

ICICI Venture seems to have got a toehold in Karvy Stock Broking, which, sources said, is most likely to have parted with a chunk of its equity in favour of the domestic private equity (PE) fund.

While neither the value of the deal nor the size of the stake could be officially ascertained, it is learnt that Hong Kong’s Century Pacific Group, which had invested in Karvy in mid-2005, wanted out.

Century Pacific had picked up a 20% stake in Karvy Stock Broking for Rs 83 crore, which had valued Karvy at Rs 415 crore then.Sources indicated that Karvy now values itself at around Rs 1,000 crore, which is probably one of the reasons why others opted out of the race.

Karvy chairman C Parthasarathy, however, denied the closure of any deal with ICICI Venture.

Read more in The DNA Money article.