The Hindu : Business : $35-m investment in JRG approved

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Wednesday, Aug 29, 2007
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$35-m investment in JRG approved

K. Venkiteswaran

Authorised capital to be increased

KOCHI: An extraordinary general body meeting (EGM) of JRG Securities Limited here on Friday approved the proposed $35 million (around Rs.140 crore) investment in the company by Messrs Duckworth Limited, a 100 per cent subsidiary of Baring India Equity Private Fund II Limited, subject to regulatory approvals. Duckworth Limited is a company incorporated under the laws of Mauritius.

In the EGM held at the registered office of JRG Securities in Pala, it was also decided that the authorised capital of the company shall be increased to Rs.40 crore from the current Rs.15 crore.

Convertible warrants

Duckworth Limited will be subscribing 1,03,82,174 equity shares of Rs.10 each at the rate of Rs.48 a share, that is, at a premium of Rs.38. Duckworth will also subscribe 1,33,33,333 convertible warrants entitling the holder of the warrants to exercise an option to subscribe 1,33,33,333 equity shares of the company having a face value of rupees ten at the rate of Rs.48.

The EGM approved the subscription of 16,57,237 convertible warrants to the promoters of JRG Securities. Both the warrants for promoters and Duckworth are convertible within a period of eighteen months from the date of subscription.

It has also been decided that a Non-Banking Financial Company would be formed with JRG holding 57 per cent stake and Duckworth holding 43 per cent stake. JRG is investing in this company at par, that is, at the rate of Rs.10 a share and Duckworth will be investing at the rate of Rs.14 a share, that is, at a premium of 40 per cent to par. Company officials said the NBFC is being floated primarily to fund both equity and commodity divisions of JRG.

Financial services

Addressing a press conference after the EGM here on Friday night, JRG Securities Limited Chairman T.M. Venkataraman said that the investment from Baring India will help the company diversify to become of the largest distributors of financial services in the country. “We will consolidate our position in the retail investment segment and surge ahead in areas of stock and commodity broking and other financial services”, he said.

Baring India partner Subbu Subramaniam said that in the next 18 months, JRG would make significant investments to further grow its distribution capabilities by increasing the branch network, franchisees and sales centres across the country.

“Additional product capabilities will be built in Portfolio Management Services, research, margin finance and distribution of insurance, mutual funds, and real estate”, he said.

The company also plans to launch exclusive wealth management relationship services in six months.

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