INDIA BUSINESS WORLD - March 16th - March 31st - 2008
GOLDMAN SACHS BUYS OUT PRATHAM INVESTMENT AND TRADING PVT LTD (PITPL)
After parting ways with the Kotak Mahindra Group in 2006, the Goldman Sachs (GS) is building its business brick by brick in India. One of the world’s largest financial services giant, GS is buying out Pratham Investment and Trading Pvt Ltd (PITPL), a Mumbai-based non banking financial company, and will pump in Rs 200 crore in the firm. The acquisition is likely to give GS a foothold in the corporate lending business. It is routing the investment through Goldman Sachs (Mauritius) NBFC.
PITPL is owned by the Bubna family which is in the paper industry. The family has tie-ups with paper mills of Europe, Sri-Lanka, Bangladesh and South Asia. When contacted Akshat Bubna, one of the directors in PITPL, declined to comment.
US-based Goldman Sachs Group is betting big on India and like other foreign financial services company buying out small NBFCs in the domestic market to kickstart operations. GS has invested in several fully-owned financial services companies, besides picking equity in other Indian companies.
Goldman Sachs (India) Securities (earlier known as Alstar Corporate Advisory Services) was launched in 2006 to start merchant banking, stock broking and underwriting businesses. In 2007, GS launched Goldman Sachs Asset Management for investment advisory services, asset managment services and portfolio managment services.
Recently, GS picked up picked up a 20% stake in Chennai-based non-banking finance company (NBFC) Shriram Credit Company. The Rs 300 crore investment was routed through its Mauritiusbased investment arm G S Strategic Investments valuing the company at Rs 1,500 crore. In the same deal, GS has retained the option to increase the stake upto 25% in the share capital of the company.
In the latest PITPL deal, GS plans to invest $7.5 million upfront and the balance $42.5 million in the next 24 months or so.
Goldman Sachs, which had investments in Kotak Securities and Kotak Mahindra Capital Company, had sold off its 25% stake in the firms in 2006 to start its own financial services firm in India and take advantage of the India growth story.
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