Three Indian Banks keen on acquisition investments

Three Indian banks, HDFC Bank Ltd, Kotak Mahindra Bank Ltd and IndusInd Bank Ltd, reported Thursday that they are keen on making further acquisition investments. HDFC recently announced that it is keen on entering a merger with a bank from the Southern part of India, though it did not disclose any names.


Regardless, Kotak Mahindra, on the other hand, had raised about $296 million through selling part of its stake to Sumitomo Mitsui Financial Group Inc, an amount for which, according to reports, it is keen to put on investment acquisitions. Further more, the IndusInd Bank was as well reported as saying it is keen on securing some acquisition investments and is currently considering a number of proposals.


It emerges that Indian Investment bankers are currently monitoring a number of old private banks, such as City Union Bank Ltd, Catholic Syrian Bank Ltd, Karnataka Bank Ltd, Karur Vysya Bank Ltd and the South Indian Bank Ltd as potential investment targets. Reports indicate that the Indian banking industry may witness more mergers and acquisitions investments deals in 2010, when compared to preceding years, prior to the country’s publication of licensing regulations for new banks planning to commence operations in the coming two years.


However, it remains anybody’s guess whether the three investment banks keen on additional investments have got the mandate for the purported investments, but a number of independent brokers are currently approaching potential investors, such as the three banks, with proposals over possible targets.


Reports as well surfaced that a foreign bank is fronting the stocks of some Southern India old private banks to its clients for investment over hopes that the market value of the acquired banks in southern Indian will increase considerably if the new generation banks actively court them for acquisition. HDFC Bank’s managing director and CEO, Aditya Puri, while addressing shareholders at the bank’s annual general meeting, confirmed reports that the bank was keen on a merger with a bank in the Southern part of the country.


The IndusInd Bank, even though not so forthcoming on its plans, had reports suggesting that it was actively pondering some proposals. The bank’s managing director and CEO, Romesh Sobti, said the bank was open to acquisitions currently, reiterating that it is confident with its financial backing, but he would not divulge details. IndusInd Bank previously, in 2003, acquired Ashok Leyland Finance Ltd, part of the Hinduja Group for which it belongs as well.


8 July 2010.