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Morgan Stanley buys 2.5% in JM Financial

Morgan Stanley buys 2.5% in JM Financial
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First Published: Mon, May 31 2010. 10 00 PM IST
Updated: Mon, May 31 2010. 10 00 PM IST
Mumbai: An investment arm of former foreign partner Morgan Stanley bought nearly 2.5% of shares in JM Financial Asset Management Pvt. Ltd for Rs68.24 crore on Monday.
Morgan Stanley Mauritius Co. Ltd raised its stake in the firm to nearly 4.8% on a day Mint reported that industrialist Mukesh Ambani is eyeing a majority stake in the asset management company.
Morgan Stanley Mauritius, which held a 2.37% stake in JM Financial, bought another 18.4 million shares at Rs37.06 a share in a block deal, according to Bombay Stock Exchange data.
Citigroup Global Markets Mauritius Pvt. Ltd sold 10.29 million shares, while private equity fund Tiger Global Ltd sold its entire holding of 8.1 million shares.
JM Financial shares rose 20% to Rs38.10 at the close of trade in Mumbai. The volume of shares traded on Monday was about 60 times the three-month daily average.
Three years ago, investment banker Nimesh Kampani sold his 49% stake in the joint venture investment banking company JM Morgan Stanley Securities Pvt. Ltd for $445 million, or a little under Rs2,000 crore.
“If a partner does not want to be with you, one has to move on,” he then said.
But in another deal, Kampani acquired Morgan Stanley’s stake in JM Morgan Stanley and its subsidiaries for $20 million, or just about Rs88 crore, to maintain his control over the money manager.
Mint reported on Monday that negotiations are on with Mukesh Ambani-controlled Reliance Industries Ltd, India’s most valuable company, for a deal that values JM Financial at about 8% of its assets under management, or Rs6.85 billion ($147 million) as of April.
JM Financial manages assets worth Rs8,569 crore in a total of 27 investment plans. If the acquisition goes through at that valuation, it would be one of the biggest in India’s mutual fund industry.
The deal is Mukesh Ambani’s first attempt to enter Anil Ambani’s territory since the estranged brothers scrapped a non-compete agreement between them a week ago. The brothers, who split the family empire in 2005, agreed to compete against each other for the first time.
anirudh.s@livemint.com
Pooja Thakur of Bloomberg contributed to this story.
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First Published: Mon, May 31 2010. 10 00 PM IST