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Birlas set to buy Apollo's broking biz what could mark its foray into the broking space, the Aditya Birla Group is set to acquire the Chennai-based Apollo Sindhoori Capital Investments (ASCIL), a leading stock broking firm promoted by Apollo Hospitals group chairman Dr Pratap C Reddy. The Reddy family as promoters, have struck a deal to allow the Birla Group to acquire a 51% stake in ASCIL. The transactions fine print and board level changes will be finalised in two weeks, sources told . Promoters of Apollo have decided to almost exit from the financial services business, in line with the groups current strategy to focus more on expanding their core business of healthcare. The decision is also prompted by the current volatility in secondary market operations. It is considered to be a good deal for the Birla group, which had announced its intention to enter the stock broking and distribution business. It has also turned bullish on offering PMS services. When contacted, Apollo Sindhoori executive director PS Subramaniyam said, “We are holding talks with a couple of players to come in as strategic investors. Nothing has been finalised yet. Dr Reddy will continue to remain as promoter.However, sources close to the Apollo Group said it also held talks with Reliance and JP Morgan Group. The enterprise value for ASCIL has been pegged at over Rs 400 crore and Apollo (Dr Reddy family) will get 50% of it for divesting 51% stake. As on March 31, 2008, ASCIL had a net worth of Rs 28.70 crore. It had a paid up capital of Rs 5.54 crore (promoters held more than 65%). It reported a 124% jump in net at Rs 22. 13 crore for the year ended March 31, 2008 against Rs 9.81 crore in 2006-07 with total income of Rs 122.84 crore last year. The board had declared an interim of 10% in addition to 70% paid. It has debt of Rs 43.19 crore, netblock of Rs 23.81 crore, current assets of Rs 47 crore and total assets of Rs 71.90 crore. The company is in the process of splitting the face value of the stock from Rs 10 into Re 1. On Monday, the 10 paid up share price spurted to Rs 416 on exchanges from the previous day’s closing price of Rs 396. viswanathan.balasubramanian It had only buyers with no sellers. Earlier, in November 2007, the company tried to join the list of leading Indian stock broking firms in tapping the private equity market to support its aggressive expansion plan. It had planned to raise about Rs 35 crore through private placement of shares with overseas investors at a premium of Rs 550 per share. It also planning stock options worth Rs 22 crore at the same price to eligible employees. The board had approved private placement of 6.35 lakh shares at a premium of 2.5% over and above the price calculated as per SEBI DIP guidelines subject to a minimum of Rs 550 per share with overseas corporate bodies. The board also approved a stock option scheme to issue 3,87,800 shares as per the same Sebi guidelines to eligible employees at the price at which the private placement will be finalised. While it identified some overseas investors, the PE deal did not fructify. Then, in the last three months, the promoters were looking at divesting their stake and they had mandated a leading merchant banker to select the investor, sources said. Formed in 1995 for carrying on the business of stock broking, ASCIL now offers trading in equity and derivative segments on the National Stock Exchange and Bombay Stock Exchange through a single screen. It also offers trading facility in commodities, including bullion, oil, gaur seed etc through its subsidiary Apollo Sindhoori Commodities Trading. The company has pan-India presence with over 700 offices across the county and a clientele of over 1.4 lakh customers. In the last two years, it has doubled coverage with its own branches plus franchisees. The company has widened its services and entered PMS in a big way.