Private sector bank IndusInd Bank on Tuesday announced that it has acquired IL&FS’ brokerage business – IL&FS Securities Services Limited (ISSL).
However, IndusInd Bank refused to disclose the financial details of the deal. Reports claim that the acquisition is an all-cash deal and conclusive agreement has been signed that gives IndusInd Bank 100% ownership of the newly acquired entity.
Reserve Bank of India has already approved the transaction, but the acquisition still awaits other regulatory approvals. The acquisition process will reportedly take nearly three months to complete.
“The acquisition will help us scale up the present capital market business in the bank and bring new specialized products, hitherto not offered by us, to our clients,” said Romesh Sobti, MD & CEO of IndusInd Bank.
IndusInd Bank’s share prices hit record of Rs 1,995 during early trading hours on Wednesday. But the share price soon nosedived to wipe out the early gains and was trading at Rs 1,965.25 at 2:47 pm IST.
Founded in 20006, ISSL performs various critical functions to facilitate capital market operations. This mainly includes functions like professional clearing, depository, and custodial services. It serves both retail as well as institutional clients. A statement issued by the company claims that it boasts over 1,000 brokers and records three million transactions a day.
IndusInd Bank’s acquisition comes amid banking sector’s ballooning NPA problem, which has taken a huge toll on banking stocks. Although this acquisition may not help in changing investor’s mood but it will certainly bring some respite to banking stocks.