JM Financial announces separation from Morgan Stanley

Chennai, Feb 23 (UNI) JM Financial today announced in principal, the decision to separate from Morgan Stanley in the joint venture in investment banking and securities broking business.

The joint venture, which was inked in 1997 and formalised in 1999, had established as a pre-eminent investment bank as well as equity broking, research, wealth management and advisory and securities distribution operations in India during the decade-long relationship, according to an official release here.

JM Financial group, established in 1973 and a pre-eminent Indian Investment Bank by itself prior to the joint venture with Morgan Stanley, will acquire the 49 per cent holding of Morgan Stanley in JM Morgan Stanley Private Limited (JMMS), the investment banking company together with its subsidiaries engaged in fixed income, equity broking, wealth management, advisory and distribution businesses of the joint venture at around book value for USD 20 mn equivalent to Rs.88.5 crore at the current exchange rate.

JM Financial will simultaneously sell to Morgan Stanley, their 49 per cent holding in JM Morgan Stanley Securities Private Limited (JMSPL), the institutional equity broking company for USD 445 mn equivalent to approximately Rs 1,970 crore at the current exchange rate.

The transaction was expected to close by the first quarter of Financial Year 2007-08.

JM Financial Group and Morgan Stanley have agreed that all existing mandated transactions will be executed by the current joint venture and the partners in the manner currently in practice in a seamless way keeping the clients' interest as utmost priority.

JM Financial Group has recently ramped up their asset management business with the addition of a private equity fund and a real estate fund to the existing mutual fund business.

The group has also forayed into securitized assets and special situations investing activities.

Besides these, the group runs a non banking financial company and a commodities research and broking business.

UNI