Mumbai: Broking services firm Edelweiss Capital Ltd said on Wednesday it has signed an agreement to acquire Anagram Capital for Rs164 crore in an all-cash deal, boosting the former’s retail broking reach.
Edelweiss plans to operate Anagram as a subsidiary with investments in research, products, training and technology, it said in a press release to the National Stock Exchange.
“This acquisition is in sync with Edelweiss’ plan to expand the retail broking business. What makes this transaction exciting is the minimal overlap between the broking operations of both the companies,” Rashesh Shah, chairman, Edelweiss Group said.
“Given the size of the transaction, it won’t be an issue,” Deepak Mittal, chief financial officer at Edelweiss said when asked as to how the deal would be financed.
Edelweiss has a balance sheet size of Rs5,000 crore, Mittal said.
“The deal is cheap and at a good value,” an analyst at a Mumbai-based brokerage said on condition of anonymity.
“It will also give Edelweiss a good foothold in retail broking segment with a ready set of network mostly in Maharashtra and Gujarat,” the analyst said.
Anagram has a nation-wide network of more than 137 branches and over 1,300 sub brokers.
It has more than 180,000 clients and an estimated total revenues of Rs100 crore for the nine months ended 31 December 2009.
Anagram’s average daily equity trading volume is approximately Rs800 crore.
At 11.18 am, Edelweiss shares were up 1.58% at Rs456.95 in the Mumbai market that was down 1.54%.