HSBC is splashing out £120million to gain a majority stake in an Indian stockbroking firm.

The British bank wants to tap the country's rapidly growing number of wealthy people.

It plans to buy 73.2% of Indian brokerage IL&FS Investsmart for 10.03 billion rupees (£120.1 million).

HSBC will buy 43.85% of the firm from a unit of E*Trade and the rest from the Indian brokerage's founder, Infrastructure Leasing and Financial Services.

The number of Indians with personal wealth of more than $1 million (£511,000) has risen 20% in the past year to 100,000. Economic growth in India has averaged 8.7% since 2003, with rising investments in shares, bonds and mutual funds.

HSBC also plans to sell life insurance in India through a joint venture with state-run Canara Bank and Oriental Bank of Commerce.

But investment is not a oneway street. Indian brokerage Religare was last week given UK approval for its £55.5million acquisition of City firm Hichens, Harrison Co, which will catapult it from domestic presence to a global one.