Even as the biggest banks in the West are struggling for survival, India’s public sector banks remain an attractive investment choice for overseas investors. Standard Chartered Private Equity has picked up stake in Karur Vysya Bank Ltd and Indian Overseas Bank through bulk deals on Bombay Stock Exchange. The stakes in both the banks have been bought from Swiss Finance Corporation, an arm of Swiss bank UBS AG, in trades executed on February 26.
Standard Chartered PE has bought 2.385 million shares of Karur Vysya Bank at Rs 198.80 each for a total of Rs 47.43 crore. The shares amount to a 4.42% stake in the bank. The private equity firm has also bought 3.6 million shares of Indian Overseas Bank at a price of Rs 47.25 per share aggregating to Rs 17.03 crore. This amounts to 0.66% stake in the bank.
Besides Standard Chartered PE, both the banks have also seen interest from hedge funds. Activist hedge fund The Children’s Investment (TCI) holds a 9.14% stake in India Overseas Bank according to the shareholding details as of December 2008. Another hedge fund, US-based Frontpoint Financial Services Fund LP, bought a 1.14% stake in Karur Vysya at Rs 199.7 per share yesterday from open markets.
In December last year, Standard Chartered PE upped its stake in portfolio company Mahindra & Mahindra Financial Services to 7.4% by picking up 2% stake from open market.
Standard Chartered PE, one of the oldest private equity players in India market, is also reportedly in race to acquire 32% in general entertainment TV broadcast firm Multi Screen Media. It was earlier reported to be interested in a management buyout of Mars Restaurants. Standard Chartered PE also announced first close of Asia Infra fund at $568 million, a fund it’s raising with IL&FS Investment Managers.