Indusind Bank Plans To Fund M & As

IndusInd Bank plans to start funding mergers and acquisitions. IndusInd will offer this service to its clients through its investment banking subsidiary which it plans to set up by October 1997.

The bank plans to offer this service through fund-based and non-fund based activities. The non-fund based services will include general advice on either acquisitions or defences, yearly retainerships for designing poison pills defences, yearly retainerships for designing anti-greenmail devices and yearly retainerships for designing long term shareholder maximising value.

The bank will also offer its services by managing public offers, arranging bank guarantees for public offers, merger funding syndications and will also undertake the valuation of shares and ongoing market-watch activities.

 

On the fund based services front, the bank will arrange short-term funding, arrange for the funding of buy back of non-convertible debentures and arrange equity participation in funding patterns.

The bank will also enter into underwriting of debt obligations of companies.

We are however not interested in funding hostile takeovers, said V B Raju, vice president of investment banking services at IndusInd Bank.

The investment banking subsidiary that will look after the funding of mergers and acquisitions will be set up with an initial paid up capital of Rs 25 crore. IndusInd will submit the memorandum for the new company to the Reserve Bank of India by the end of May 1997.

The bank has approached various foreign investment banks to form the investment bank and is currently awaiting their reply.

The investment bank will spin off another subsidiary within one year of starting operations which will look after securities broking activities.

The securities broking arm of the bank will tap high net worth individuals and non-resident Indians for its business.

The securities broking subsidiary will tie up with NRI servicing foreign banks in Bahrain, Dubai, Saudi Arabia, Hong Kong, Singapore and London.

The company will also offer other financial products such as mutual funds or money market mutual funds.

The company will also undertake share buyback programmes for corporates.

IndusInd Bank is currently speaking to various NBFCs for lead managing its public issue which is slated to hit the market by the end of September 1997.