D.E. Shaw and Reliance Industries are expected to launch an Indian stock brokerage by 2012 (via Bloomberg).
The joint venture, which will be called DE Shaw India Financial Services Pvt. Ltd, has already begun operations in asset management, and is looking to branch out to real estate and infrastructure. It then aims to start its brokerage for trading Indian equities and futures.
Louis Salkind, managing director of DE Shaw on a visit to India, spoke to Business Standard about the joint venture’s plans to launch the brokerage by mid-2012:
“We will by then look to become a corporate investment bank offering all traditional services such as sales and trading, M&A advisory, financing and underwriting, and merchant banking.”
Salkind didn’t reveal the size of the India-specific private equity fund that spans all sectors, but said it would be raised domestically, and the investments would be of the size of other international investment banks. Salkind said they would offer traditional financial products and eventually branch into real estate and infrastructure.
Salkind believes the venture’s move online will be successful because there’s little competition in the market. Citing Merrill Lynch as an example of their success Salkind pointed out that DE Shaw developed Farsight Financial Services, the first company to integrate brokerage and banking, and offer those services online. That technology became “the base of Merrill Lynch’s online financial system.“
Now a little background.
DE Shaw India’s operations first began in 1996. The company’s first announced their joint venture, that will be named DE Shaw India Financial Services Pvt. Ltd, in March this year. The venture would build financial services in India and earlier this month, we wrote about their intention to launch India’s biggest bank, that has been dubbed the ‘Bank of Ambani’.
Reliance Industries India’s largest private sector conglomerate has been looking to grow and is rapidly looking for acquisitions. It is looking to use the surplus cash on its balance sheet for new investments. It was revealed earlier this year that the company aimed to invest $25 – $30 billion in its major businesses over the next five years.