Currently, ABN Amro and IL&FS hold 40 per cent stake each in Hoare Govett (India) Securities Ltd. The stake is being hiked through the acquisition of the company's shares from other shareholders and a rights issue.

ABN Amro will purchase 10 lakh shares from International Finance Corporation (IFC), Washington, for a consideration of Rs 10 per share. It will also purchase five lakh shares held by employees' welfare trust of the company.

ABN Amro will subscribe up to 13.25 million shares of the company at Rs 10 per share including the purchase of rights from IL&FS and up to five million shares from the employees' welfare trust.

The rights issue is proposed to be made in the ratio of three share for every two shares held which will increase the equity base of the company from Rs 10 croreto Rs 25 crore.

Both IL&FS and its employees' welfare trust have agreed to renounce up to five million shares out of their rights entitlement of 6.75 million shares in favour of ABN Amro. The board of the company has already passed a resolution supporting ABN Amro's stake hike from 40 per cent to 75 per cent.

The Department of Economic Affairs (DEA) supported the company's proposal subject to its conformity with the Reserve Bank of India (RBI) and Securities & Exchange Board of India (Sebi) guidelines and the total foreign investment inflow, including amounts already brought in which should be to the tune of at least $5 million.