Mirae Asset acquires Indian brokerage firm Sharekhan for $360 million

South Korea’s leading asset manager Mirae Asset Financial Group has acquired Sharekhan Ltd., India’s 10th-largest brokerage firm, to enhance its presence in the Southeast Asian country, one of the world’s fastest-growing markets in the post-China era.

Mirae Asset Securities Co. on Tuesday signed an agreement to buy the entire stake in Sharekhan from French investment banking group BNP Paribas for 30 billion Indian rupees ($360 million).

The purchase includes not just Sharekhan, a traditional brokerage house with a business focus on stock trading, but also three other affiliates – Espresso, an online stock trading firm; a non-banking financial company (NBFC) that offers personal loan services; and Sharekhan Dot Com.

Established in 2000, Sharekhan was acquired by BNP Paribas in 2016. With equity capital of $160 million, Sharekhan has about 3,500 employees.

The company posted $21 million in net profit in 2022. It operates 130 branches across India, managing about 3 million client accounts.

Industry sources said in August that Mirae Asset was among the shortlisted bidders for Sharekhan, conducting due diligence on the brokerage to acquire it.

TOP ASIAN MARKET POST-CHINA

Through the acquisition of Sharekhan, Mirae Asset aims to strengthen its presence in India’s retail brokerage segment.

Mirae Asset Securities established its India operations in 2018 – Korea’s first brokerage to do so in the country. There, the company is expanding its services online by offering digital trading systems.

Its affiliate Mirae Asset Global Investments Co. set up a local corporation in Mumbai in 2006.

With the launch of its first investment fund in India in 2008, Mirae Asset Global Investments has since grown to become the country’s ninth-largest asset manager. It now operates 37 funds with 41 trillion won in assets under management in India. It is the No. 1 foreign asset manager operating in the country.

In 2019, Mirae Asset Global Investments India transformed into a holding company to take charge of financial services in India and other Asian countries.

Last year, the Indian corporation established a Dubai office, becoming Korea’s first asset manager to enter the Middle East.

FOUNDER PARK HYEON JOO’S AMBITION

Park Hyeon Joo, the founder of Mirae Asset Financial Group and its global investment and strategy officer (GISO), has set his sights on India as the company’s next growth target.

“India is a country with infinite growth potential,” Park told The Korea Economic Daily in an exclusive interview on Tuesday.

“With this acquisition of ShareKhan, we have seized the opportunity to take the lead in the Indian securities industry, which is growing fast. Mirae Asset Group’s next 20 years of global expansion will begin here.”

Park said Mirae Asset has carried out 13 M&As in overseas markets and the group now plans to focus on increasing shareholder returns, including share buybacks, instead of seeking more acquisitions.

However, he said China and the US are still attractive to Mirae Asset. He added that the company hopes to invest in growing US industries such as artificial intelligence and biotechnology.

In October, the financial group promoted Swarup Mohanty, head of its Indian asset management subsidiary, to vice chairman, the No. 2 post in the group.

According to the International Monetary Fund, India’s GDP is forecast to expand 5.9% this year, outpacing China’s expected 5.2% growth.

In April, India overtook China to become the world’s most populous country. Nevertheless, the country is young and has huge growth potential, analysts said. India's median age is estimated to be 31 by 2030, compared to China’s 42.

With China showing signs of slowing amid a trade dispute with the US, global funds are flowing into India.

AGGRESSIVE OVERSEAS EXPANSION

Park, the founder and de facto chairman of the group, assumed the GSO role in 2018 to take the lead in Mirae Asset’s global expansion.

Mirae Asset Securities runs its overseas affiliates in 10 countries, including Indonesia, India, Vietnam, the UK and the US.

The company has expanded its presence in advanced countries by acquiring local financial firms. In May, Mirae Asset bought the UK’s leading exchange-traded fund (ETF) manager Goldenberg Hehmeyer LLP (GHCO) for $35 million to step up its ETF services in Europe.

As of the end of June, Mirae Asset Securities’ global equity capital stood at over 4 trillion won.

Affiliate Mirae Asset Global Investments bought New York-based Global X ETF for $488 million in 2018.

The asset manager said in July its ETFs worldwide surpassed $100 billion in net asset value as the world’s 13th-largest ETF manager.

(Updated with more comments from the interview with the founder)

Write to Man-Su Choe at bebop@hankyung.com

In-Soo Nam edited this article.