Axis Bank planning ringgit bonds: Source

Axis Bank is planning a 500 million Malaysian ringgit ($156 million) bond issue by early June and has appointed bankers to manage the sale, a bank source said.The bank has appointed Standard Chartered and Royal Bank of Scotland as arrangers to the issue.

IFCI raises bar for strategic investor

IFCI Ltd, the troubled term lender that has started the process of inducting a strategic partner, has agreed to its creditor banks’ demands to convert all their debenture holdings into equity shares.

This formula, which is expected to be ratified at a board meeting on December 1, could jeopardise the prospective partner's attempt to gain management control at the New Delhi-based institution.

The short-listed bidders for a stake in IFCI include Blackstone Group, General Electric Capital Corporation, billionaire Wilbur Ross along with Goldman Sachs Group, Standard Chartered and HDFC, Cargill Financial Services Corporation, Natixis and Newbridge Asia. Their bids will be considered after the conversion issue is resolved.

Read more in The Business Standard article.

IDFC in race for IFCI`s 26% stake

Infrastructure Development Finance Company (IDFC), an investor in public works, is interested in IFCI, competing with the Blackstone Group and General Electric Capital Corporation for a stake in the state-run project financier.

The winner of the 26 per cent IFCI stake will gain access to a market where lending grew 28 per cent last year, and where the central bank limits foreign banks’ ownership of local private rivals to 5 per cent. IFCI, bailed out by the government in 2003 because of bad debts, in July announced plans to sell stake to a local or overseas investor to bolster its capital

Other bidders including a group led by billionaire Wilbur Ross and comprising the Goldman Sachs Group, Standard Chartered and HDFC, were vying with Cargill Financial Services Corporation, Natixis and Newbridge Asia for the stake, IFCI said last month.

Read more in The Business Standard article.

Essar Communications to raise $3.95-bn syndicated loan

Essar Communications, Ruias-promoted telecom company and partner of UK giant Vodafone in India, is planning to raise $3.95 billion of syndicated loan.The loan proceeds would help Essar monetise its liquidity rights agreed with Vodafone as part of the British company's acquisition of Indian mobile operator Hutchison Essar, now known as Vodafone Essar, earlier this year.The funds would also be used for partly refinancing the existing debt and to fund further investment and expansion plans of the group.

Vodafone had acquired a controlling stake in Hutch Essar earlier this year for $10.9 billion from Hong Kong- based Hutchison Telecom International Ltd (HTIL).

The loan was launched by arrangers BNP Paribas, Citigroup, Commerzbank and Standard Chartered on Monday, a statement said here. The fully-underwritten deal would mature in December 2011 and pays a margin of 90 basis points over LIBOR.

StanChart to buy 25.9% more in UTI Sec next year

After having acquired 49% stake for Rs 147 crore in UTI Securities, Standard Chartered Bank is looking to buy another 25.9% next year. It plans to take complete control of the financial services firm by 2010.

“Under the agreement with Securities Trading Corporation of India (STCI), we have the option to increase our stake to 100% in UTI Securities by 2010. We will be looking at acquire an additional 25.9% at a fixed price in 2008, while the remaining stake will be acquired in 2010 for the amount, which still needs to be determined,” said Neeraj Swaroop, chief executive officer-India, Standard Chartered Bank.

The proposal for clearing the stake was cleared by FIPB on Tuesday and the final deal was signed on Thursday.Swaroop said the management control would rest with both the partners, STCI and StanChart. “There will be 8 members on the board — 4 from STCI, 3 from StanChart and 1 is an independent director”.

With this acquisition, the foreign bank will be able to reap the benefits of institutional broking, retail broking and online broking facilities. “We can now use the retail banking portal, mutual fund products, investment banking and institutional brokerage facilities of UTI Securities. Their huge product range will help 2 million customers,” Swaroop said.

This strategic partnership will help the foreign bank establish offices in places where UTI Securities have its presence. As it is difficult for foreign banks in India to acquire licenses from the regulator, this is the best way for the bank to expand its network.

Standard Chartered to acquire 49% stake in UTI Securities

Global banking major Standard Chartered Plc on Thursday entered into a strategic partnership with the Securities Trading Corporation of India (STCI) to acquire the latter's 49 per cent stake in UTI Securities for Rs 147 crore.STCI owns 100 per cent of UTI Securities after acquiring it in 2006 from the Administrator of the Specified Undertaking of the Unit Trust of India.

Under the agreement, the parties have provided for necessary options to raise Standard Chartered's stake to 100 per cent in stages by 2010, subject to necessary regulatory approvals, a release issued here today said.

According to Standard Chartered CEO Neeraj Swaroop, "the partnership will enable Standard Chartered to broaden its product offering in wealth management and private banking within India and the non-resident Indian (NRI) product portfolio in our footprint countries."

StanChart-UTI Securities Deal May Be Cleared By FIPB Today

Standard Chartered Bank's proposal to pick up 49 per cent stake in broking firm UTI Securities is under the consideration of Foreign Investment Promotion Board (FIPB), reports TV channel CNBC-TV18.FIPB is taking up the Stanchart proposal at a meeting to be held on August 17. So this deal is likely to be cleared today. The financial terms are not known as this post is being written.

UTI Securities is currently owned by Securities Trading Corporation of India, which had put 49 per cent stake in the broking firm on the block. There were several firms like Kuwait's Global Investment House, Citigroup, Macquarie Bank, and Societe Generale in talks with STCI to buy a stake.

Several banks are looking for an entry into broking and financial products distribution, so a firm like UTI Sec offered synergy. STCI bought UTI Sec in February 2006 for Rs 265 crore from the Specified Undertaking of UTI. STCI will sell 49 per cent of it now, and the rest after the lock-in period which will end in 2009.

ICICI to raise $1.5 bn in loans

ICICI Ltd is raising $1.5 billion via a yen-denominated loan-the country's biggest offshore loan for a financial borrower, sources familiar with the deal said.

The loan has three equal-sized maturity buckets to fund general corporate purposes. The five-year portion is the longest maturing loan to be issued by ICICI. ICICI, already Asia's biggest issuer outside of Japan in the offshore bond market this year, is trying to feed fast-growing India's frenzied loan market as deposit growth struggles to keep pace.

Lending by Indian banks is growing at an annual pace of 29 per cent, but deposit growth is a more modest 20 per cent. The issue is being arranged by Bayern LB, BNP Paribas, Calyon, Commerzbank, Goldman Sachs, HSBC, Intesa Sanpaolo, Natixis, Standard Chartered Bank and Sumitomo Mitsui Banking Corp.

The 364-day tranche will pay 15 basis points (bps) over the one-year London Interbank Offered Rate (LIBOR); the three-year tranche will pay 38 bps over LIBOR; and, the five-year tranche will pay 55 bps over LIBOR.

The bank plans to complete the syndication of the loan by the first week of September. ICICI's offshore senior debt is rated BBB-minus by Standard & Poor's Ratings Services.

India Infra Finance hires banks to raise $500 m loan

India Infrastructure Finance , the state-owned lender that set up a fund with Blackstone Group LP and Citigroup Inc, plans to borrow $500 million from a group of banks in its first overseas loan.

The New Delhi-based company has hired BNP Paribas SA, Calyon and Standard Chartered Plc to raise the 10-year, government-guaranteed loan, said S S Kohli, chairman and managing director at India Infrastructure. It will use the funds to finance roads, airports, power plants and other infrastructure projects in the South Asian nation.

Prime Minister Manmohan Singh estimates India needs to invest $320 billion by 2012 on infrastructure to lift annual growth to 10 per cent by 2012 from 9.4 percent in the year ended March 31.

India Infrastructure signed an agreement in February with New York-based Citigroup, Blackstone and Mumbai-based Infrastructure Development Finance Co. to start a $5 billion fund to build roads, ports and other utilities. The fund will invest $2 billion in equity and the remainder in debt.

Read more in The Business Standard article.

StanChart close to buying stake in UTI

Asia-focused bank Standard Chartered plc is in final talks to buy a 49 percent stake in Indian brokerage UTI Securities, the latest bank to buy into the country's brokerage sector.

The deal would help Standard Chartered expand its services for wealthy customers in India, a fast-growing private banking market, by offering stock brokerage.

"The UTI transaction is in final due diligence," Peter Flavel, Standard Chartered's global head of private banking, said in Singapore, confirming earlier press reports.

Standard Chartered is joining a clutch of foreign players, including Citigroup Paribas that have invested in India's fast-growing brokerage sector.

UTI, which is owned by the Securities Trading Corp. of India, has 170 branches across the country, according to press reports.

Read more in The Economic Times article.

Mutual fund Lotus India sees assets grow to $2 bn

Lotus India Asset Management, a Mumbai-based mutual fund group, expects funds under management to nearly treble to $2 billion (Rs8,112 crore) in the next 10 months as it targets Indian retail investors, an executive said on Thursday.

Lotus is a joint venture between Fullerton Fund Management, a unit of Singapore’s state investor Temasek Holdings, and London-based Sabre Capital Worldwide, which was founded by former Standard Chartered chief executive Rana Talwar.The group has launched seven mutual funds, raising $700 million, since November 2006 and plans to launch 10 to 12 more funds.

Indian mutual funds had total assets of Rs3.5 trillion ($86 billion) in April, up 36% from a year earlier, according to data from the Association of Mutual Funds in India.
Bagga, who previously worked at Citibank and GE Capital in India, said growth was likely to come from retail investors, thanks to higher savings, and from the pension industry as the government opens up the sector to fund managers.

Read more in The Live Mint article.

RIL to raise $2 bn via 10-year loan

Reliance Industries, the country’s largest private sector company, is raising $2 billion through a 10-year overseas syndicated loan for funding its oil and gas exploration in the D6 block of the Krishna-Godawari basin.

The D6 was among the blocks awarded to a consortium of Reliance Industries (90 per cent) and NIKO (10 per cent) under the NELP I round of bidding. Currently, the JV is developing India’s first deep water gas production facility for the Dhirubhai 1 and 3 fields, targeting the first gas in the second half of 2008.

The $2 billion syndicated loan is arranged by a consortium of 14 banks including Citigroup, ABN-Amro, Standard Chartered, HSBC, ICICI Bank and DBS. The full commitment by banks for the loan is expected to be completed this week, said industry sources.

Read more inThe Business Standard article.

Dabur's Unza buyout plan faces hurdles

Dabur India’s proposed buyout of Singapore consumer goods company Unza is delicately poised, with the management resisting the Indian company’s takeover bid. It’s learnt that the private equity (PE) investors who own Unza may begin independent negotiations with other interested parties.

However, talks between Dabur and the PE investors — Actis and Standard Chartered — haven’t fallen through and the Indian FMCG company is hopeful of a breakthrough this week.

At around Rs 650-675 crore, it would be Dabur’s most expensive buy so far and the largest overseas deal in the consumers goods space. Unza, a $150-million company, is majority-owned by Actis and Standard Chartered.

Unza is South-East Asia’s independent manufacturer of personal care products with 48 brands in its portfolio and presence in five markets like China, Singapore, Malaysia, Hong Kong and Indonesia.

Read more in The Economic Times article.

StanChart-UTI deal on Monday

UK-headquartered Standard Chartered Bank is set to become the third foreign player to enter the Indian retail stock brokerage business by buying a 49 per cent stake in UTI Securities for Rs 140-150 crore.

UTI Securities is currently fully-owned by Securities Trading Corporation of India (STCI). Sources said an agreement would be signed between the two parties in the coming week, probably on Monday.

The stake price values UTI Securities at Rs 300-325 crore. STCI, a primary dealer in government securities, had bought the entire UTI Securities stake for Rs 265 crore last year from Specified Undertaking of UTI, the trading arm spun off from the financial institution UTI in 2001-02.

The deal with Specified Undertaking of UTI requires STCI to have a minimum lock-in of its 51 per cent stake in UTI Securities for three years.

Read more in The Business Standard article.

Global NBFCs want to play it big in India

Top global financial firms which have acquired a foothold in the Indian non-banking finance companies’ (NBFCs) segment are now pursuing an aggressive strategy to expand their reach within the country.

Fullerton India, a subsidiary of Temasek, the Singapore government’s investment arm, is emerging as one of the most aggressive players in the financial sector. The firm is now drawing up plans to open 400 branches over the next 12 months to scale up its operations from the current base of 100 branches.

Other recent entrants in the NBFC segment include biggies such as AIG Capital while other global players — BNP Paribas and Societe Generale have also entered the business by acquiring stakes in Indian firms.

The aggressive moves by these firms come at a time when entrenched firms such as Citi Financial and StanChart’s Prime Financial have been pursuing a scorching growth strategy. Besides, the new players have to contend with local firms — Future Group and Indiabulls which have also forayed into this business during the past few years.

Read more in The Economic Times article.