Catholic Syrian to sell 15% stake to AIF Capital Development; seeks RBI nod for sale

Kerala-based Catholic Syrian Bank is in the process of selling a 15% stake to AIF Capital Development, a Mauritius-registered private equity firm. It is seeking the Reserve Bank of India’s (RBI) permission for the same. The RBI’s policy on shareholding in private sector banks allows any single entity to own a maximum of 10% stake in a bank. Catholic Syrian Bank hopes to get clearance from the RBI to have a single shareholder owning more than 10% stake as has been allowed in Yes Bank (Rabobank – 19.29%) and Centurion Bank of Punjab (BankMuscat – 17.76%). AIF Capital Development has already obtained clearance from the Foreign Investment Promotion Board (FIPB). The government’s guidelines allow up to 74% foreign ownership in banks.

The bank plans to make a preferential allotment to AIF Capital to fulfill the central bank’s requirement that every private sector bank must have a minimum net worth of Rs. 300 crores. The bank had a net worth of Rs. 215.58 crores as on March 31, 2006. The Kerala-based bank has a network of 334 branches and extension counters, which include 5 NRI branches, 5 SSI branches, 5 industrial finance branches and 4 service branches.

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23 foreign investment plans cleared by FIPB; plans included those of Reliance Communications, Lehman Brothers

The Foreign Investment Promotion Board (FIPB) approved foreign investments worth Rs. 5910.66 crores on Tuesday, reports The Economic Times. Of this amount, the major chunk is expected to flow into Reliance Communications by way FII investments worth Rs. 5400 crores. The company will raise this money through ADRs and GDRs worth $1.2 bn. The government also approved US investment bank Lehman Brothers’ planned investment of Rs. 225 crores in its Indian arm. Velcan Energy, a French power generation company has also got an approval to invest Rs. 200 crores in the Indian renewable energy sector. The company will now convert its operating company in India to an operating-cum-holding company. The FIPB has also given permission to Mauritius based Horse-Shoe Capital to invest Rs. 45 crores to make downstream investments in companies engaged in providing telecommunication infrastructure. The other approvals include a nod to Hong Kong-based Haier International for marketing and distribution of Haier brand mobile phones. The company plans to set up a joint venture with a foreign equity of 51% for single-brand retail. The government has also cleared the application of US-based Bloomingdale International, which will allow the company to set up a chain of five-star and three-star hotels in the country. The company will invest Rs. 8.6 crores as per the application. Singapore-based Sincere Watch has also got an approval to set up a wholly-owned subsidiary to set up duty free shops at airports, seaports and SEZs. Bank of Muscat has also got a go ahead from the board to invest Rs. 10.92 crores in an NBFC in India (See Related Post). Other approvals include Delta Plus’ plans to set up a JV with 90% foreign equity for warehousing and export activity. Deutsche Post international has been permitted to raise its stake from 49% to 51% in DHL Danzas, which is engaged in carrying on business of transportation, air freight and ocean freight.

BankMuscat buys stake in domestic brokerage Mangal Keshav

Oman’s largest listed company, BankMuscat, is buying 43% stake in brokerage firm Mangal Keshav for an undisclosed sum. This acquisition makes BankMuscat the single-largest investor in the Indian financial services and securities sector from the Sultanate. The financial due diligence on behalf of BankMuscat was done by PriceWaterhouse Coopers India, while the legal due diligence was done by Amarchand Mangaldas. The transaction is expected to be completed in first quarter of 2007.

The Mangal Keshav Group was set up in 1939 and is one of the oldest brokerage houses in India. It is present in securities trading, commodities trading, insurance broking and IPO / mutual fund distribution space. The group is one of the top 20 brokers in the country by market share and is a member of all leading equity and commodity exchanges. It is also a member of the Dubai Gold & Commodities Exchange and has an office in Dubai.

As per Morgan Stanley research, the Indian equity markets is seeing one of the strongest rallies and trading volumes are expected to double to $3.2 trn in 2010 from about $1.6 trn currently. Morgan Stanley projects the Indian brokerage business to grow to $3.9 bn by 2015. Several leading international banks such as Citigroup, BNP, ABN-AMRO, etc. have announced their foray in the securities business in India.

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