Indusland Bank surges on plans to acquire brokerage arm of IL&FS

Indusland Bank has signed a purchase agreement to acquire 100 per cent shares of IL&FS' securities services subsidiary. The agreement is subject to regulatory approvals.

The brokerage arm of IL&FS, namely IL&FS Securities Services Limited (ISSL), is a capital market intermediary for professional clearing, depository and custodial services. The company services FIIs, FPIs and more than a 1,000 domestic clients.

For FY18, the ISSL reported a revenue of Rs. 324.5 crore with a PAT of Rs. 45 crore, while the cost of acquisition was not disclosed in the announcement made by the company.

Indusland Bank is an expansion mode. This acquisition will help the bank expand its capital market business through an addition of clients as well as specialized products. Last year, in October, the bank decided to merge with India's leading micro-finance company, Bharat Financial Inclusion (BFIL) in an all-stock deal. This merger aims at diversifying into micro-finance sector which provides livelihood loans with high yields and low defaults.

Meanwhile, the stock of Indusland Bank was buzzing on the bourses on Wednesday. The stock opened at Rs. 1,985.00 per share and hit a new 52-week high of Rs. 1,995.00 in early morning trade. At 10:35, the stock had cooled off and was quoting Rs. 1,978.50 per share, down by 0.25 per cent, when the benchmark index S&P BSE Sensex was at 35,526.84, up 36.80 points or 0.10 per cent.