June 2011
« May   Jul »

Contact us

Group of local and foreign funds buys 5% in ING Vysya via QIP for Rs 300 crore

A group of local and foreign funds led by private equity funds ChrysCapital, Morgan Stanley and India Advantage Fund have spent about Rs 300 crore to buy more than 5% in ING Vysya Bank. The funds bought the stake through the private bank's Rs 513 crore qualified institutional placement (QIP) that closed recently.

The investment comes at a time when fund-raising has significantly slowed down amid unfavourable market conditions and the funds spent despite the share quoting at a discount to offer price.

According to QIP allotment details disclosed to the NSE, six funds, including Warhol, a ChrysCapital entity, Morgan Stanley, Aberdeen, Bajaj Allianz Life Insurance, India Advantage Fund and Kotak India Growth Fund together subscribed to more than half of the QIP portion.

Warhol, Morgan Stanley, Aberdeen, and Bajaj Allianz Life Insurance raised their existing holdings, while India Advantage Fund bought fresh stake of 2.14% and Kotak India Growth Fund bought equity of 1.27%.

ING Vysya Bank finalised the allotment on June 16 when the share closed at Rs 329.40 on the BSE, a 4% discount to the QIP price of Rs 342.10 a piece. The difference between the share price and QIP price has widened since then. On Friday, the stock closed at Rs 328.

The successful closure of ING Vysya's QIP issue despite weak market shows that appetite for investment in the banking sector still exists given its high growth potential, analysts said. Analysts remain bullish on the sector's prospects in the medium to long-term hoping that efforts to tame stubborn inflation will yield positive result.

Indian banks have been attracting investments this year with a few small and medium-sized banks striking deals with institutional investors. Among recent deals, a group of private equity investors and one financial institution bought a combined stake of more than 30% in Ratnakar Bank by picking up the unsubscribed portion of the bank's rights issue of Rs 720 crore.

The investors include Beacon India Private Equity Fund, Cartica Capital, Faering Capital, Gaja Capital Partners, Norwest Venture Partners and Samara Capital, and HDFC, among others. A private equity consortium also picked up close to 20% stake in Dhanlaxmi Bank for 291 crore last month. ING Vysya Bank, in which the Dutch financial major ING group holds 43.4%, has raised 970 crore, including 513 crore through the QIP route and the balance 457 crore by way of preferential allotment to promoters.

Source: Economic Times


Comments are closed.