The global financial giant will acquire 43.85 per cent from Mauritius-based unit of E*Trade Financial Corp and the rest 29.36 per cent from Indian brokerage’s founder, Infrastructure Leasing & Financial Services Ltd, for Rs 200 a share, HSBC said in an e-mailed statement from Hong Kong.

In addition, HSBC will also pay Rs 82.01 crore ($19.4 million) to Infrastructure Leasing & Financial Services (IL&FS) as part of a three-year non-compete agreement, it said.

“The investment is of strategic importance to HSBC as it gives us foothold in one of the largest retail broking markets in the world. The acquisition is consistent with our strategy of investing primarily in faster growing emerging markets,” HSBC Group Managing Director & Chief Executive Officer, Asia Pacific, Sandy Flockhart, said.

Service position
HSBC will also make an offer to buy an additional 20 per cent from other shareholders in Investsmart.  “Investsmart’s retail brokerage business will be a great addition to our offering in India. The company’s local expertise and strong management team will play a key role in strengthening our service proposition in India,” HSBC India Chief Executive Officer Naina Lal Kidwai said.

Market cap
Investsmart operates in different financial services segments, including equity and commodity broking and mutual funds distribution.

It has a market capitalisation of around Rs 1,200 crore ($300 million) and is listed on the premier stock exchanges in the country while its global depository shares are listed on the Luxembourg Stock Exchange.

HSBC has a customer-base of 20 lakh in India and has operations in a variety of verticals in financial services like banking, investment banking, capital markets, asset management and insurance broking.

The bank has 47 branches and 170 ATMs across 26 cities in the country and has an staff-strength of over 33,000.