Banks, FIs' overseas M&A funding jumps three-fold

Indian corporate houses have stepped up the tempo for overseas mergers and acquisitions (M&As) in 2006-07. Keeping pace with the momentum, Indian banks, with extensive global branch network, have raised the volume of funding to Indian entities for M&As.

In 2006-07, the overseas M&A funding by state-owned banks and financial institutions - State Bank of India, Bank of Baroda (BOB) , Bank of India (BOI) and Export and Import Bank of India (Exim) -- was close to $2 billion, almost a three-fold increase over the previous financial year. Private sector major ICICI Bank bags the top slot. However, bank officials refused to divulge the numbers. SBI's direct funding was close to $1 billion, BOI ($450 million), BOB ($370 million) and Exim Bank (over $400 million).

The size of funding by Indian banks is small compared with their their global counterparts due to the small balance sheet size.ICICI Bank's deputy managing director Chanda Kochhar said her bank assistance stands on three strands - advisory, structuring the finance for M&A deal and underwriting and syndication of funds.In a particular deal ICICI takes about 25 per cent funding exposure on its book and the balance 75 per cent is syndicated, she said.

Read more in The Business Standard article.