Mumbai: CGS-CIMB Securities, the stock broking joint venture between China Galaxy Securities and Malaysia’s CIMB Group, has decided to exit India, said a person with direct knowledge of the matter. The broking firm’s country head Devesh Kumar is in talks with his employer to acquire their stakes in the company, the person said.
If the deal goes through, Kumar is expected to own the firm through his entity — Earnest Innovation Partners (EIP). Email queries to CGS-CIMB and Kumar went unanswered as of press time.
Both CGS and CIMB own 50 per cent each in the broking firm, which caters to institutional clients. CGS-CIMB has about 100 executives in its institutional broking team including sales and research.
Industry sources said CGS-CIMB may have decided to move out as they have not been able to scale up the business. With competition intensifying and revenues shrinking, many smaller institutional brokers are struggling to make profits.
While there have not been big exits from the Indian broking industry, many institutional brokers have been looking to cut costs.
In early 2018, CGS bought 50 per cent stake in CIMB in a global deal and became a 50:50 joint venture. In 2012, CIMB entered the Indian market through the acquisition of the Royal Bank of Scotland’s (RBS) India divisions and expanded business lines to include Private Client Group (PCG) and Corporate Advisory.