SBC Warburg, the investment banking division of Swiss Banking Corporation (SBC), is gearing up its Indian operations. Armed with a clutch of mandates to raise nearly $2 billion in debt funds, the company is seeking Category-I merchant bank status from Sebi. It has also sought National Stock Exchange (NSE) membership for its proposed stockbroking joint venture with Sungrace Mafatlal.
The company has also formed a partnership with SBI Caps to raise the debt funds, a portion of which will be raised from domestic sources.The $3.54-billion SBC Warburg is one of Europes leading investment banks. If it receives Sebis approval, it will become the second FII to do so, after Jardine Fleming.
Briefing newspersons in Mumbai yesterday, SBC Warburg India chairman Euan Macdonald announced that the company is working on mandates worth nearly $2 billion, which will be invested in infrastructure projects in India. It will team up with SBI Caps to secure many of these transactions.
The money will be raised over two-three years, for projects promoted by five different companies. SBI Caps will help to raise rupee resources and also provide advise on some global deals.
SBC Warburg Indias major mandates include the Tata-led consortiums Bangalore airport project, Daewoo Corporations 1,000 mw power plant and National Grid Corporations transmission project in Karnataka.
We have a major commitment to India and the debt raising is part of the overall plan, said corporate finance head Frank Hancock.
Of the $2 billion to be raised, nearly $250 million is sought for National Grid Corporations power transmission project in Karnataka. The total project cost is put at $350-400 million.
The money will be raised from the capital market and through syndicated loans. Since the requirements are complex, the solution is also a mixed one. We are not just depending upon one source, explained Hancock.
SBI Caps and SBC Warburg will raise around Rs 1,400 crore in global as well as domestic markets for Daewoos 1,000 mw power project.
Work is currently being carried out on the projects first phase, which has a capacity of 500 mw.
The Bangalore airport project is worth over Rs 5,000 crore, but its fate is still uncertain as the Centre and state government are yet to resolve their differences over the project.
SBC Warburg has also secured mandates for two more projects, a telecom venture and a $1-billion aluminium smelter project in Orissa. However, Hancock refused to divulge details, saying they were new mandates and the final details were still being worked out.
The companys joint venture with Sungrace Mafatlal is expected to begin operations by the year-end. SBC Warburg will hold a 75 per cent stake in the venture, while the Mafatlals will hold the remaining 25 per cent.
SBC Warburg also unveiled its first research study on Indias downstream oil sector, consisting of refineries and gas distribution company Gas Authority of India Ltd.
