Friday, February 23, 2007

Feel vindicated in my call, but a fool to not have acted upon it - Indiainfoline

I had written about Indiainfoline a few months ago. Here is what I had written then -

The domestic stock broking business looks to be headed for days of hectic M&A activity. We may soon have a whole host of foreign companies buying out Indian companies. Things have started moving in this direction already. Take a look at some of the deals that have been struck over the past few months:

1). Sharekhan (Promoted by SSKI): Interested parties - New Atlantic Partners and IDFC.
2). Investsmartindia (Promoted by IL&FS): E*Trade.
3). Geojit Financial Services: BNP Paribas.
4). Motilal Oswal: New Vernon Private Equity Ltd and Bessemer Venture Partners.
5). Indiabulls: No single strategic investor. But there seems to be a beeline of foriegn investors for this company. They have a phenomenal 53 per cent stake in this company. See the Sept'06 shareholding pattern.

I think quite a few of these will be sold off sooner than later. Their share prices have witnessed good jump in recent times. However, among the listed broking firms, there is one company called "Indiainfoline". This company has so far remained out of the limelight. Difficult to believe that it hasn't been approached by any of the large foriegn investor yet. I think something could be cooking up here as well. My conspiracy theory is that it will be bought out by Anil Dhirubhai Ambani's new venture R Trade. Having already missed the rally in Indiabulls, IL&FS Investsmart India, Geojit; Indiainfoline is a company one should watch out for in days to come.

Today, Indiainfoline is quoting at Rs.386, up from around Rs.190 per share in October 2006. A 100% gain missed completely there :(. And, the news is that Meriyll Lynch is looking take a majority stake in the company and may also come out with an open offer to acquire a further 20 per cent stake in the company. Ofcourse, the Indiainfoline Board has come out and denied the rumours. But, like George Roberts, partner of Henry Kravis of KKR, said in the famous movie - Barbarians at the Gate - , "Rumours are just premature facts". I believe this could just be one of them!!


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