Fundraising
Choice International Announces ₹900 Crore Strategic Investment in Subsidiary CEBPL by South Korea’s NH Investment & Securities
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Choice International Limited has executed definitive agreements enabling its material subsidiary, Choice Equity Broking Private Limited (CEBPL), to raise approximately ₹900 crore through the issuance of Compulsorily Convertible Preference Shares (CCPS) to South Korea-based NH Investment & Securities Co., Ltd. The transaction is intended to strengthen CEBPL’s capital base and support future expansion without changing management control.
PRICE-SENSITIVE TRIGGER
Event: Execution of Shareholders’ Agreement (SHA) and Share Subscription Agreement (SSA) for strategic investment in CEBPL.
Type: Strategic Investment / CCPS Issuance
Impact: Positive
Immediate Effect: The agreements enable CEBPL to raise fresh growth capital from an international institutional investor, subject to regulatory approvals, while maintaining existing management control and promoter ownership structure.
Financials:
Key Metrics:
- Investment Amount: ₹899.99 crore
- Instrument: 42,25,350 Compulsorily Convertible Preference Shares (CCPS)
- Issue Price: ₹2,130 per CCPS
- Face Value: ₹10 per CCPS
- Securities Premium: ₹2,120 per CCPS
- Expected Completion: Within 12 months from execution, subject to statutory and exchange approvals
- CEBPL FY26 Turnover: ₹573.26 crore
- CEBPL Contribution to Group Turnover: 51%
- CEBPL Net Worth: ₹449.39 crore
- Contribution to Group Net Worth: 25%
Highlight:
- ₹899.99 crore strategic capital infusion by NH Investment & Securities into Choice Equity Broking Private Limited.
What Happened ?
Choice International Limited, its material subsidiary Choice Equity Broking Private Limited (CEBPL), and South Korea-based NH Investment & Securities Co., Ltd. have entered into definitive transaction agreements for a strategic investment through the issuance of CCPS by CEBPL.
The investment will strengthen CEBPL’s capital position to support expansion of its broking and distribution business. Upon conversion, the CCPS will convert into equity shares as per agreed terms; however, the company has clarified that the transaction will not result in any change in management or control of either Choice International or CEBPL. The equity shares issued upon conversion will rank pari passu with existing equity shares.
Strategic Investment Structure
Key Highlights:
- NH Investment & Securities Co., Ltd., South Korea, will invest approximately ₹900 crore in CEBPL.
- Funds will be raised through issuance of 42.25 lakh CCPS.
- Choice International has signed the agreements as the promoter and confirming party.
- Investment remains subject to statutory and broker exchange approvals.
- Transaction is expected to close within twelve months.
Strategic Rationale:
The capital infusion is intended to :
- Strengthen CEBPL’s capital adequacy.
- Support expansion of the broking and distribution business.
- Fund future strategic growth opportunities.
- Enhance long-term competitiveness.
- Reinforce investor confidence through participation of a leading international financial institution.
Investor Profile:
NH Investment & Securities Co. , Ltd.:
- Established in 1969.
- Headquarters in Seoul, South Korea.
- Core subsidiary of NH Financial Group.
- Operates securities brokerage, wealth management, investment banking and capital market businesses.
- Presence across more than 57 domestic offices and eight international locations.
- Workforce exceeding 3,000 professionals.
Transaction Terms:
- CCPS will convert into equity under predefined SSA terms.
- Existing management and operational control will remain unchanged.
- Investor is not part of the promoter or promoter group.
- Transaction is not a related-party transaction.
- Company and subsidiary will provide customary representations, warranties and indemnities under the agreements.
- Shareholders’ Agreement includes governance provisions relating to board composition, reserved matters, information sharing, transfer restrictions, lock-in requirements and investor protection rights.
Note:
- Choice International confirmed that neither the company nor CEBPL holds any equity stake in NH Investment & Securities before this transaction.
Risk Analysis
Summary:
- The investment strengthens the subsidiary’s balance sheet but remains contingent upon completion conditions and regulatory approvals before funds are received.
Key Risks:
- Transaction requires statutory approvals.
- Broker exchange approvals are pending.
- Closing is expected within twelve months and may be delayed if conditions precedent remain unmet.
- Definitive agreements include customary indemnity, transfer and non-compete obligations for the company.
- Governance rights granted to the investor under the Shareholders’ Agreement may influence certain reserved corporate decisions.
Worst Case:
- Failure to obtain approvals or satisfy transaction conditions could delay or prevent completion of the proposed investment, postponing the planned capital infusion into CEBPL.
Risk Level: Medium
Company Commentary
- Choice International, CEBPL and NH Investment & Securities have executed definitive agreements for strategic investment.
- The proposed investment reflects the investor’s confidence in CEBPL’s business model, management and future prospects.
- Capital raised will strengthen CEBPL’s financial position and support expansion initiatives.
- The transaction will not result in any change in management control of either Choice International or CEBPL.
- The investment is designed to accelerate long-term growth in the broking and distribution business while preserving existing ownership control.
Official Exchange Filing: Choice International Limited
