State Bank of India, the nation’s biggest lender, is forming a joint venture with the local arm of South African financial services firm Investec for institutional equities broking and research business.
The state-run bank said in a regulatory filing that wholly owned unit SBI Capital Markets Ltd (SBICAP) will invest in lnvestec Capital Services lndia Pvt. Ltd to set up a joint venture. SBICAP is the investment banking arm of SBI.
In addition, SBICAP’s wholly owned broking subsidiary, SBICAP Securities Ltd, will transfer its institutional equities broking and research business to the proposed joint venture.
SBI didn’t give any other details of the transaction. Investec didn’t respond to multiple requests for comment.
In November last year, The Economic Times had reported that the two sides had explored an option to merge Investec’s local business with SBICAP.
Investec Capital is the Indian asset management and investment banking arm of London- and Johannesburg-listed Investec Plc.
The company originally began operating in India as an aircraft financier, acquiring a merchant banking licence in 2012. It expanded its offerings over the years to include corporate finance and equity capital market services.
Investec subsequently hired a small team from brokerage firm Motilal Oswal and began its advisory business. In addition, Investec offers services in fixed-income and institutional equities in India.
Investec has beefed up its India team over the past year across multiple business verticals. In October last year, VCCircle cited Investec India head Ajeeth Narayan as saying that the firm had expanded its team for investment banking and equity capital market to boost its mid-market coverage.
In September last year, VCCircle reported that Investec had recruited two senior executives from EY India’s investment banking vertical to ramp up its corporate finance and equity capital market practices.