Sells 37.48% in Cholamandalam DBS Finance to Murugappa Group.
DBS, Singapore’s largest bank, is exiting its non-banking finance venture in India. It is selling off its 37.48% stake in Cholamandalam DBS Finance to partner Murugappa Group in a deal worth Rs 376 crore.
The shares would be purchased at Rs 91 per share, which is a 1.2% premium to the closing price of Rs 89.90 at the Bombay Stock Exchange on Monday. Shares of Cholamandalam DBS Finance closed on Tuesday at Rs 90 per share after touching a high of Rs 93.45 intraday.
“The transaction is expected to be completed on or before 12 April 2010,” a statement issued on Tuesday said.
The bank said the move was in line with its new target customer group. “DBS remains committed to India, a high-growth market, where it has enjoyed stellar performance over the past five years. The bank is executing swiftly on the new strategic roadmap unveiled by chief executive officer Piyush Gupta in February. In India, the bank wants to focus on corporate clients as well as high-networth individuals and emerging affluent segments,” it said in a response to DNA.
Gupta took charge of DBS’s India operations in November, 2009. The Murugappa Group also clarified on Tuesday that options were open for future tie-ups.
India contributes 8% to DBS’ total business, the third-largest after Singapore and Hong Kong. The India business is seen growing 20-25% in 2010-11. “DBS and Murugappa Group remain open to future collaboration opportunities in areas such as wealth management, distribution of financial products, etc.”
DBS had also earlier exited its mutual fund venture in the country, which was again in tie-up with Murugappa Group, after DBS Cholamandalam Mutual Fund was acquired by L&T Finance early this year.
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