Reliance Industries (RIL) and Standard Chartered bank may be the surprise co-bidders for a strategic stake in IFCI Ltd.
MUMBAI: Reliance Industries (RIL) and Standard Chartered bank may be the surprise co-bidders for a strategic stake in IFCI Ltd.
On Thursday, the New Delhi-based financial institution revived its plan to get on board a strategic investor, after its earlier plan in December last year fell apart.
Efforts by DNA Money to get a confirmation from Reliance Industries and Standard Chartered failed.
Sources familiar with the situation said StanChart had expressed interest in the first round of IFCI bids in December last year.
This time, StanChart and RIL will be making a joint bid, revealed an investment banking source, who preferred not to be quoted.
Competing with the powerful duo would most probably be a consortium led by the Sterlite group.
The foreign bank withdrew from the bidding process after the IFCI share price went through the roof buoyed by expectations arising out of the bids made by several suitors.
Roughly during that time the IFCI share hit a 52-week high to Rs 121.70 per share.
On Thursday, in a cryptic message to the premier stock exchanges, IFCI informed of a meeting of its board of directors, “to consider the issues relating to the induction of strategic investor and optionally convertible debentures held by Government of India.”
StanChart’s earlier bid to acquire a strategic stake in IFCI was structured by the ‘strategic initiatives group’ within the bank.
It is not known whether the same group is involved now.
Some portfolios within the bank saw a change with P R Somasundaram, who led the strategic initiatives group being moved in an internal reshuffle. He now leads StanChart’s brokerage business.
It is not clear whether RIL will be directly involved in the bids or the bid will be routed through associates of the group.
In recent times, many conglomerates including the Tatas and the Aditya Birla group have infused more men and funds into reviving their financial services business. RIL has been eyeing the retail finance business, in a strategy that is in sync with their retail business.
On Thursday, IFCI shares were among the biggest gainers in the stock exchanges. The shares finally ended at Rs 62.30, a gain of 6.5%, when the main stock market index was down 209 points.
Analysts were not sure of RIL’s gameplan as they have were never keen on the financial business, which is said to be the preserve of Mukesh Ambani’s younger brother Anil’s flagship company Reliance Capital.
In December last year, the other bidders that expressed interest apart from the Anil Agarwal’s Sterlite consortium were GE Capital, Natixis, Blackstone, Cargill Financial Services, Japan’s Shinsei Bank, Punjab National Bank, Goldman Sachs and Standard Chartered Bank.
Some weeks before the rejection of Sterlite bid, the IFCI board had approved issuing 123.7 million shares at Rs 107 each on conversion of zero-coupon optionally convertible debentures held by banks and institutions.
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