NY Life to lead 30% buy in forex unit of Centrum

Mumbai: Centrum Capital is selling a 30% stake valued at $50 million (Rs 340 crore) in its forex business to a clutch of global investors led by New York Life, extending a streak of foreign investment in India's financial services businesses. The transaction values the forex arm CentrumDirect at around Rs 1000 crore, a source said.

New York Life Investments, the global asset management division of New York Life, along with other investors like Jacob Ballas, will own a significant minority ownership of the forex network with 125 branches in 48 cities. Set up in 1998, CentrumDirect had clocked an operating profit of Rs 70 crore on a turnover of Rs 5,000 crore in fiscal 2016.

New York Life will invest $20 million (Rs 136 crore) in CentrumDirect, which also has an online play through buyforex.com and a mobile wallet presence via CentrumPay. New York Life Investments couldn't be reached for immediate comments, while Centrum Capital declined to comment. CentrumDirect competes with Weizzmann Forex and Fairfax-owned Thomas Cook Forex.

The source added that it was a secondary sale transaction and proceeds from the deal will be used by Centrum Capital to boost its fledgling home and small and medium enterprise (SME) loan businesses. Promoted by Chandir Gidwani and Jaspal Bindra, Centrum Capital is into merger advisory, primary and secondary debt placement and corporate finance. Shares of Centrum Capital closed at Rs 34.8 on BSE on Tuesday.

New York Life's proposed investment in CentrumDirect comes a few weeks after it acquired a majority stake in Credit Value Partners, a firm focusing on distressed debt and high yield corporate credit investing.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.