Mirae Asset aspires to No. 5 in Indian securities market with Sharekhan

South Korea’s leading asset manager Mirae Asset Financial Group will strive to take over the fifth-largest share of the Indian securities market with Mirae Asset Sharekhan Inc. by foraying into the South Asian country’s wealth management and investment banking markets.

According to Indian media and financial industry sources on Tuesday, Mirae Asset Securities Co. has gotten approval from the Reserve Bank of India and the Securities and Exchange Board of India for its merger with India’s 10th-largest securities firm Sharekhan Inc.

The regulators’ final nod comes about a year after the Korean securities giant signed an agreement to buy the entire stake in Sharekhan from French investment banking group BNP Paribas for 30 billion Indian rupees ($356 million).

Following the completion of the acquisition process, the Indian securities firm will start anew under the new name Mirae Asset Sharekhan.

Founded in 2000, Sharekhan boasts equity capital of $160 million with about 3,500 employees. It operates about 130 branches across India with 3.1 million clients.

With the major Indian brokerage house under its wings, Mirae Asset will accelerate its expansion push in India, which has emerged as a new land of opportunities in the post-China era.

ENORMOUS GROWTH POTENTIAL

Amid ongoing trade rows between the US and China, multinational companies and global money have fled the world’s No. 2 economy, leading to India’s rise in the global supply chain and investment market.

The Indian government is keen to invite foreign companies to do business in the country, which also elbowed China out to become the world’s most populous country last year.

With global money pouring into India, the Indian stock market has started thriving, luring more local people to flock to the country’s stock markets.

According to Central Depository Services (India) Ltd., the second Indian central securities depository based in Mumbai, India’s retail stock accounts surpassed 100 million in 2023 for the first time after growing five-fold in four years.

The South Asian country’s benchmark BSE SENSEX index also jumped 42% in three years.

INDIA’S NO. 5 SECURITIES FIRM

Mirae Asset Securities, which became Korea’s first securities firm to enter India in 2018, is expected to actively tap into India’s booming stock market with Sharekhan to foster Mirae Asset Sharekhan as the country’s fifth-largest securities firm.  

To achieve this goal, Mirae Asset Sharekhan will enhance collaboration with its asset management sibling Mirae Asset Global Investment Co., which has been running its Indian operations since 2006.

Mirae Asset Investment Managers Pvt, Mirae Asset’s Indian asset management subsidiary, is now India’s ninth-largest asset manager with 31.9 trillion won ($22.8 billion) in assets under management. It is the No. 1 foreign asset manager operating in the country.

“Mirae Asset has emerged as a new industry powerhouse in India with about 9 million accounts under management but the lack of local branches has made it difficult to reach out local retail investors,” said a Mirae Asset official. “Sharekhan has immediately allowed us to have a firm network.”

Mirae Asset Sharekhan plans to make inroads into India’s wealth management and investment banking markets while striving to expand its presence in the country’s stock and derivative investment sectors, added the official.

FOUNDER PARK HYEON JOO LEADS INDIA CONQUEST

Park Hyeon Joo, the founder of Mirae Asset Financial Group and its global investment and strategy officer (GISO), is said to have led the acquisition of Sharekhan, according to sources.

“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 in an interview with the Korea Economic Daily in December last year after Mirae Asset signed the deal to buy Sharekhan with BNP Paribas.

Since 2018, Park has led multiple mergers and acquisitions of foreign financial firms.

In May last year, Mirae Asset took over the UK’s leading exchange-traded fund (ETF) manager Goldenberg Hehmeyer LLP (GHCO) for $35 million to step up its ETF services in Europe.

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

Considering that global financial IBs have been struggling to find good M&A targets in the global brokerage market, Mirae Asset’s bet on Sharekhan is expected to pay off greatly later, the Mirae Asset official said.

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

Write to Man-Su Choe at bebop@hankyung.com
Sookyung Seo edited this article.