Mumbai: HSBC Holdings Plc’s retail broking unit in India said it will stop merchant banking operations to focus on securities services for retail and corporate clients.
The unit of HSBC InvestDirect (India) Ltd plans to surrender its merchant banking license to the Securities and Exchange Board of India, according to a statement to the Bombay Stock Exchange on Thursday. The broking business continues to operate in the cash and futures and options segments on the nation’s main equity bourses, it said.
HSBC InvestDirect, formerly known as IL&FS Investsmart Ltd, in January decided to discontinue its institutional equities broking and insurance broking businesses.
HSBC also plans to delist shares of HSBC InvestDirect, and a tender offer for publicly held shares ended earlier this month.
HSBC Holdings bought a 93.9% stake in IL&FS Investsmart for Rs1,310 crore in 2008 as it sought to tap the market for brokerage services in the world’s fastest growing major economy after China. It renamed the brokerage in August 2009.
Shares of HSBC InvestDirect, which have gained 59% this year, traded at Rs393.25 in Mumbai on Thursday.
HSBC Securities and Capital Markets (India) Pvt. Ltd and HSBC Violet Investments (Mauritius) Ltd offered to buy the shares they didn’t already own for Rs400 each in a tender offer that ended 4 May.
HSBC, which plans to use InvestDirect’s 77 branches to sell more wealth and asset management services and life insurance products to customers, had more than 160,000 customers in India for products and services tied to advisory and trading operations as of August 2009.