Essar Group, which is present in telecom, oil refining and shipping, will be another traditional industrial conglomerate entering the now-fashionable financial services business. Essar Group will invest Rs 560 crore or $140 million in Essar Capital, a public limited company that will undertake services such as non-banking finance (NBFC), asset management, equity broking, fund management, and wealth management.
All these businesses will be held under various step down subsidiaries, VC Circle has learned. Essar Global, a Cayman Islands registered company, has sought the approval from the Foreign Investment Promotion Board to invest Rs 560 crore in Essar Capital. This will be done by fresh issue of shares or convertible debentures/preference shares. Currently, the entire share capital (50,000 equity shares of Rs 10 each) of Essar Capital is held by Essar Investments Ltd, a company incorporated in India. Essar Global will acquire the shares held by Essar Investments too.
Essar joins other business houses like Ranbaxy promoters-owned Religare, Tata’s Tata Capital and Tata Securities and Reliance ADAG’s Reliance Capital to enter the financial services business. Bharti Group is also entering the portfolio management services business through a joint venture with AXA group.

Posted on 02/13/08, 3:30 PM
in: Capital Markets
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