Federal Bank to acquire a 26% stake in Equirus Capital


Mumbai: Kochi-based private lender Federal Bank Ltd on Thursday said in a stock exchange filing that it would acquire a 26% stake in Mumbai-based investment bank Equirus Capital Pvt. Ltd. Financial details of the transaction were not disclosed.

Equirus Capital said in a statement that the board of directors of Federal Bank had approved the acquisition of a minority 26% stake in the company, subject to statutory and regulatory approvals and satisfactory completion of financial and legal due diligence.

Founded in 2007, Equirus Capital is a closely held unlisted investment banking firm that has completed more than 135 transactions across mergers and acquisitions (M&A), private equity, initial public offerings (IPOs), qualified institutional placements (QIPs) and structured finance, raising over $3.2 billion in the process.

Its wholly owned subsidiary Equirus Securities offers depository services, portfolio management and research, apart from equity broking.

“Investment by Federal Bank is a strong endorsement of our team’s entrepreneurial venture now on the path to becoming an institution. With this relationship, we intend to expand our product offerings in debt, and leverage on Federal Bank’s extensive network and client base to enhance each of our business lines,” said Ajay Garg, managing director of Equirus Capital.

The investment was driven by the need to increase the product offerings to a spectrum of wholesale clients by offering comprehensive financial solutions for debt and equity capital markets, structured finance, capital market products and advisory services.

The association would aid Federal Bank in offering a host of products including wealth management services to high-net-worth individuals (HNIs) and the non-resident Indians (NRIs).

The strategic tie-up would help shore up non-interest earnings for the bank while creating additional revenue streams with identified clients, a statement added.

“This is a landmark deal that demonstrates the Bank’s wider intent to expand the horizon of its offerings to serve its wholesale and retail customer base,” Ganesh Sankaran, executive director of Federal Bank, said in a statement.

“This partnership will serve as a natural complement to our strong origination capabilities and deep client relationships in addition to positioning us as a Universal Financial Services Provider,” he added.

This is the second such transaction in recent years in the banking space. In 2012, private lender Axis Bank Ltd acquired the investment banking, equity distribution and advisory arms of financial services firm Enam Securities Ltd, in an all-stock deal valued at Rs1,396 crore.

Founded in 1984, Enam Securities offers investment banking, corporate advisory, equity broking, insurance broking, mutual fund advisory, debt, and capital market services.livemint