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Morgan Stanley top sever ties with Indian partner
By siliconindia
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Friday, 23 February 2007, 18:30 IST
NEW DELHI: Following on the heels of Goldman Sachs, Morgan Stanley, and its Indian partner ended their alliance in the world's second fastest growing major economy.
Morgan Stanley , the third biggest US securities firm by market value, will pay $445 million (Rs1,968 crore) for JM Financial?s 49 percent stake in the joint venture?s institutional equity broking business, according to an e-mailed statement. JM Financial will buy Morgan Stanley?s 49 percent stake in the joint venture?s investment banking unit, equity broking and fixed income and wealth management businesses at a book value of about $20 million, according to the statement.
?It is now the right time for Morgan Stanley to develop a wholly-owned full service India platform,? Hans Schuettler, Chief Executive Officer, Morgan Stanley Asia said in the statement.
Morgan Stanley joins Goldman Sachs Group in separating from their local partners as they seek a bigger share of the record income from merger advisory, stock underwriting and brokerage fees in India. Fees from underwriting stock and equity-linked bond sales jumped 39 percent last year to about $341 million, according to data compiled by Bloomberg.
By building out its investment banking, capital markets, fixed income and private wealth management platforms in India, Morgan Stanley will create ?an integrated platform that reflects all the businesses the firm conducts globally, Schuettler said.?JM Financial group will immediately build up their own institutional equity broking and research business,? said Nimes Kampani, chairman of Mumbai-based JM Financial Group.