StanChart builds stakes in Indian lenders
Saturday, 15 March 2008
Joe Leahy
Analysts and bankers said they believed a foreign bank might hold such small strategic stakes through hedge funds and other third-party asset managers, writes
Standard Chartered has built small stakes in several Indian banks, seeking a foothold in the country in anticipation of the eventual liberalisation of rules restricting foreign ownership.
Neeraj Swaroop, Standard Chartered's India chief executive officer, said the UK-based emerging markets bank, "like any foreign player interested in India", had taken stakes of up to 5.0 per cent in "a few banks". He did not disclose further details and a preliminary review of listed banks' shareholding structures did not reveal direct holdings by StanChart.
But analysts and bankers said they believed a foreign bank might hold such small strategic stakes through hedge funds and other third-party asset managers. The Reserve Bank of India has capped investment by foreign banks in a domestic private sector bank at 5.0 per cent.
Buyers of such stakes either hope to launch their own takeover bids or gain leverage over rivals' bids if there is consolidation.
"When the banking sector is opened up, as a bank with a small stake, you can say to your competitors: 'I own 5.0 per cent, it's my seat, I'm buying it out'," said Seshadri Sen, an analyst with Macquarie.
Among foreign groups with stakes in Indian banks, units of Citigroup hold 12 per cent of Housing Development Finance Corporation, parent of HDFC Bank, while an affiliate of HSBC holds 5.0 per cent of Axis Bank, according to data on the Bombay Stock Exchange.
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FT Syndication Service
Analysts and bankers said they believed a foreign bank might hold such small strategic stakes through hedge funds and other third-party asset managers, writes
Standard Chartered has built small stakes in several Indian banks, seeking a foothold in the country in anticipation of the eventual liberalisation of rules restricting foreign ownership.
Neeraj Swaroop, Standard Chartered's India chief executive officer, said the UK-based emerging markets bank, "like any foreign player interested in India", had taken stakes of up to 5.0 per cent in "a few banks". He did not disclose further details and a preliminary review of listed banks' shareholding structures did not reveal direct holdings by StanChart.
But analysts and bankers said they believed a foreign bank might hold such small strategic stakes through hedge funds and other third-party asset managers. The Reserve Bank of India has capped investment by foreign banks in a domestic private sector bank at 5.0 per cent.
Buyers of such stakes either hope to launch their own takeover bids or gain leverage over rivals' bids if there is consolidation.
"When the banking sector is opened up, as a bank with a small stake, you can say to your competitors: 'I own 5.0 per cent, it's my seat, I'm buying it out'," said Seshadri Sen, an analyst with Macquarie.
Among foreign groups with stakes in Indian banks, units of Citigroup hold 12 per cent of Housing Development Finance Corporation, parent of HDFC Bank, while an affiliate of HSBC holds 5.0 per cent of Axis Bank, according to data on the Bombay Stock Exchange.
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FT Syndication Service