The board of directors of JM Financial, which met on Thursday, approved a proposal, in-principal, to separate from Morgan Stanley in the joint ventures for investment banking and securities broking business.
According to a release issued by JM to the BSE, the company will acquire 49% holding of Morgan Stanley in the investment banking company, JM Morgan Stanley (JMMS), at around the book value of $20 million (equivalent to Rs 88.5 crore).
"JM Financial will, simultaneously, sell to Morgan Stanley its 49% holding in JM Morgan Stanley Securities (JMSPL), the institutional equity broking company, for $445 million (approximately Rs 1,970 crore)," the release added.
Nimesh Kampani, chairman, JM Financial group, said: "The rapidly growing Indian economy is opening up new vistas for growth in financial services. The time is ripe for Indian businesses of JM Financial's stature to build an Indian institution of global standards and reach."
"JM Financial is focused on expanding their area of operations and grow all businesses in a synergistic rapid pace. The separation will allow the (JM Financial) group to capture these opportunities on the foundation of their firm values of long-term business focus backed by strong relationship with the clients. JM Financial group will immediately build up their own institutional equity broking and research business. The group already has the relationships and expertise for these businesses, and will enhance the infrastructure needed to add these to their current portfolio."
JM Financial group recently ramped up their asset management business with the addition of a private equity fund and a real estate fund to the existing mutual fund business.
The group has also forayed into securitized assets and special situations investing activities. Besides these, the group runs an NBFC and a commodities research and broking business.