Baring Asia invests $44m in Indian brokerage

Hong Kong-based Baring Private Equity Asia has invested $44 million in Karvy Stock Broking, a financial services provider in India. Baring Asia entered into an agreement with ICICI Venture, a long-established Indian private equity firm, to acquire stake of around 32 percent in the business for 5 billion Indian rupees ($127 million; €87 million), according to local daily The Economic Times.

The deal puts the enterprise value of the securities firm at around 15 to 16 billion rupees, lower than some of its competitors which have attracted private equity investments.

The financial sponsors are buying out an existing investor, Hong Kong’s Pacific Century Group, in addition to injecting fresh capital into the company to facilitate further expansion and other working capital requirements, Baring Asia said in a statement. 

Sources told the Indian daily that ICICI Venture and Baring Asia are buying a 20 percent stake held by Pacific Century, while an additional 12 percent stake will be offered to them in the form of fresh equity. Pacific Century had acquired its stake for 830 million rupees in 2005, which had valued Karvy at about one-quarter of its current enterprise value, the report added.

Baring Private Equity Asia is in advanced stages of fundraising after its third fund closed on $490 million last year. Baring has been as active deploying capital as it has been making realizations across the region, and according to sources, is advancing toward a $1.5 billion close for its fourth pan-Asian fund. Baring India, led by Rahul Bhasin, is raising a separate country-focussed fund.