PE funds in talks to form a consortium to pick up stake in Catholic Syrian Bank.

Industry:    2016-02-05

Global and domestic private equity investors such as TPG Growth, TA Associates, Apax Partners, IVFA, Everstone, Kedaara and Multiples are in talks to form a consortium to pick up 25-35% of Thrissur-based Catholic Syrian Bank (CSB). The mid-sized bank has put off its initial public offering plans and is now in talks with several PE investors to raise $200 million (Rs 1,300 crore), valuing the company at Rs 4,000-4,800 crore, said three people with direct knowledge of the development. While they are negotiating as a group, each investor is limited to a 5% stake by Reserve Bank rules. “Due to the lacklustre capital markets, the bank’s management has shelved the public listing plans and they are now looking at raising growth capital from private equity investors,” said a person who is part of the discussions. “The existing HNIs (high net-worth investors) will sell part of their stake and the bank will issue some fresh shares to bring the capital into the company,” said the person who is part of the discussions. About half of CSB is held by around 10 institutional investors and HNIs and it’s not clear which of them will be exiting. In 2007, three PE funds — Siguler Guff, AIF Capital and Gartmore — picked up 5% each in the bank. In 2010, Edelweiss acquired a 5% stake. “Siguler Guff and AIF will stay invested in this round,” said another person involved in the deal. “However, other individual HNIs might cash out in the proposed fund-raise.” Some of the HNI investors include Yousuffali MA, owner of Lulu Supermarkets, a Middle-East and south India-focused chain of supermarkets, and Bangkok-based Sura Chansrichawla. Neither of these two investors is expected to exit. CSB Managing Director Anand Krishnamurthy didn’t respond to queries. Spokespersons for Everstone Capital, Multiples, IVFA, TA, TPG Growth and Kedaara also didn’t respond to queries. A spokesperson for Apax Partners declined to comment in an emailed response. CSB focuses on small and medium enterprises (SMEs), retail and non-resident Indian customers. It caters to them through SME, retail and corporate banking services and has treasury operations. For the year to March 2015, the bank had a capital adequacy ratio of 11%. Total advances amounted to Rs 9,471 crore a .. Read more at: http://economictimes.indiatimes.com/articleshow/50858550.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

print
Source: