According to the Economic Times, apart from BNP Paribas, a PE consortium of Warburg Pincus and General Atlantic were also pursuing an acquisition of Sharekhan but the negotiations exceeded the exclusivity period following which BNP Paribas struck a deal with the company.
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Though the banking and financial services company was silent on the deal value, it is understood to be around Rs 2,200 crore.
“It is good to see some traction in the retail broking space”.
Sharekhan will join BNP Paribas’ personal investors division, which is a key player in retail broking and digital banking services with 1.7 million clients across Europe, the French firm said in a statement.
BNP Paribas SA is a provider of banking and financial services, has four domestic retail banking markets in Europe, namely Belgium, France, Italy and Luxembourg.
The purchase of Sharekhan was a unique opportunity to build on the company’s achievements in the Indian market and to further expand their business in India. Today it is one of the most well-known online brands in India and has been constantly profitable over the past 12 years.
The bank offers a wide range of financial services covering corporate and institutional banking, transaction banking and wealth management.
BNP Paribas was one of the first foreign banks to establish a presence in India in 1860.
Sharekhan claims a 7 per cent market share in terms of number of investor accounts with 1.2 million clients. This has resulted in brokerage firms working on very low yields.
Founded by Shripal Morakhia and Shreyas Morakhia in 1995 as SSKI Investor Services, Sharekhan, started offering brokering services to non-institutional clients only in 2000. In April 2006, GA Global Investments had entered by acquiring the equity holding of Carlyle in the firm. In the past, it had raised capital from HSBC Private Equity, Intel Pacific Inc and others.
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CVCI owns 60% in Sharekhan while IDFC holds 10%, Baring Asia Private Equity 14%, IDFC 10%, Samara Capital 5% and the management and employees hold the remaining balance.
