With the aim to boost its presence in the rising domestic market, HSBC has decided to acquire 73.21 percent of an Indian brokerage IL&FS Investmart Ltd in an all-cash deal for US$ 261 million.

Mr. Sandy Flockhart, chief executive officer of HSBC Asia Pacific said, “This investment is of strategic importance to HSBC as it gives us a foothold in one of the largest retail broking markets in the world.”

Mumbai-Based IL&FS Investmart has over 2,000 employees and provides various financial services such as equity and commodity broking, investment banking and fund distribution to 138,000 customers in 133 cities.

The acquisition, not only allows HSBC to grow its presence in the domestic brokerage space, but also facilitate other foreign banks and companies to foray in Indian markets.

Apart from this, HSBC will also make an open offer for acquiring another 20% in the local securities broking company.

HSBC, via its subsidiaries, would acquire 43.85 percent from E*Trade Mauritius Limited, a unit of U.S. online brokerage firm E*Trade Financial Corp and a 29.36 percent from Infrastructure Leasing and Financial Services (IL&FS) for $241.6 million or 200 rupees per share.

Moreover, HSBC will also pay IL&FS US$ 19.4 million as part of a three-year non-compete contract.