INDIA BUSINESS WORLD - DECEMBER 16^th - DECEMBER 31^st - 2007

MERRILL LYNCH, FIIS, OTHERS BUY STAKE IN NETWORTH FOR RS 50 CRORE

A clutch of strategic investors have picked up stake in domestic broking house Networth Stock Broking through preferential issue of equity shares and convertible warrants. The deal size stands at Rs 50 crore. The list of investors include Hemendra Kothari promoted DSP Merrill Lynch, two foreign institutional investors (FIIs) - Mavi Investment Fund (FII - MM Warburg (Schweiz)) and Peninsular South Asia Investment - South Asia Access Fund and Corporate Bodies. Mackertich Consultancy Services and Stewart Investment & Financial are the other investors.

The preferential issue is subscribed by the investors at Rs 131.40 per share. The deal is subject to approval from the Securities & Exchange Board of India (Sebi), the shareholders and other regulatory authorities, said the brokerage. The Rs 35 crore infusion into the company, would be through the issue of additional equity shares. Upon conversion of warrants, the company would receive an additional Rs 15 crore.

The capital will be utilised towards increasing the margin capital requirements for Networth's broking business, scaling and upgrading the technology infrastructure, expansion of the branch network alongside strengthening the wealth management and advisory vertical of the company. Further, the broking house is exploring the option of acquiring an existing NBFC as part of the group's plans.