1. SBI has set aside Rs 20,000 crore liquidity for lending to telecom companies that have recently won the bids for 3G spectrum. This will reduce its liquidity to half, assuming that there would be no further outgo other than the Rs 20,000 crore earmarked for telecom operators. Disclosing this to the media in Hyderabad on Saturday, SBI chairman OP Bhatt said for the year ended March, 2010, SBI will be left with 50% of its existing liquidity. Bhatt mentioned that some of the telecom operators, who have bagged 3G spectrum licences, have approached SBI seeking lending. On interest rates, he said it has not hardened so far. But if money for the 3G auctions goes out of the banking system to the government, the liquidity would dry up resulting in the interest rates going up.
2. The boards of ICICI Bank and Bank of Rajasthan (BoR) on Sunday approved the merger of the latter with India's largest private sector bank in a no-cash deal that is valued at about Rs 3,000 crore. The banks have agreed on a final swap ratio of 1: 4.72 one share of ICICI Bank for 4.72 shares of BoR- for the merger. The board considered the results of due diligence covering advances, investments, deposits, properties and branches and employee-related liabilities, and the valuation report of Haribhakti & Co, to arrive at such a swap ratio, said Chanda Kochhar, managing director & CEO of ICICI Bank, adding the bank has to seek permission from RBI and will hold its EGM on June 21 "As per our legal advise we do not need to go to the government for the approval of the Foreign Investment Promotion Board," said Kochhar. This is the first take over by ICICI Bank after Kochhar took over as CEO. Speaking to FE, Kochhar said BoR is a value buying and not a bailout proposition. BoR will add 3 million customers and start contributing to the profit of ICICI Bank from next year. "By diluting 3% equity , we are adding 25 % of more branch network at one go. BoR will augment ICICI Bank's loan book and deposits by around 8% each. We have now the largest number of branches among the private sector banks," she added. ICICI Bank's valuation of BoR is on the basis of Rs 6 crore per branch On BoR's sticky assets, Kochhar said, "We have verified all the details". Pravin Tayal, who was asked by RBI to dilute family's over 55 % equity to about 10%, said "no decision" has been taken on his representation the ICICI board after the merger. "I respect the amalgamation scheme decided by the Board," he said. With BoR board approving the swap ratio the proposal will now go to the Extraordinary General Meeting (EGM) slated on June 21, BoR director KN Bhandari said. Asked whether the merger will adversely impact BoR employees, Bhandari said, "All BoR employees will be retained and there will no job losses."
3. Standard Chartered on Sunday said it has fixed the price band for its proposed issue of 240,000,000 Indian Depository Receipts (IDRs) at between Rs 100-115 per IDR. The issue, which will remain openfrom May 25 to May 28, will raise up to $588 million. The bank has revised the target, which was earlier set at $750 million. Retail investors and eligible employees subscribing to the IDRs under the retail and the employee portion respectively, and whose bid amount does not exceed Rs1,00,000, will benefit from a further 5% discount to the final issue price, a bank statement said. Allotment of the IDRs is scheduled to be completed by June 7, with listing on the Bombay Stock Exchange and the National Stock Exchange shortly thereafter. In late March, StanChart said it aimed to raise at least $500 million and not more than $750 million in its IDR sale. Since then, London-listed shares in the lender have fallen nearly 9% amid a broader global selloff. Ten IDRs will represent one underlying share of the company, and the new shares issued in aggregate would constitute 1.16 % of its post-issue paid up capital,the statement said. "The issue of IDRs is a more brand-building exercise than capital mop up," the bank said. Capital Markets Ltd has been named as the co-book-running lead manager (co-BRLM). The Co-BRLM will only be involved in the marketing of the issue, the statement said.
2. The boards of ICICI Bank and Bank of Rajasthan (BoR) on Sunday approved the merger of the latter with India's largest private sector bank in a no-cash deal that is valued at about Rs 3,000 crore. The banks have agreed on a final swap ratio of 1: 4.72 one share of ICICI Bank for 4.72 shares of BoR- for the merger. The board considered the results of due diligence covering advances, investments, deposits, properties and branches and employee-related liabilities, and the valuation report of Haribhakti & Co, to arrive at such a swap ratio, said Chanda Kochhar, managing director & CEO of ICICI Bank, adding the bank has to seek permission from RBI and will hold its EGM on June 21 "As per our legal advise we do not need to go to the government for the approval of the Foreign Investment Promotion Board," said Kochhar. This is the first take over by ICICI Bank after Kochhar took over as CEO. Speaking to FE, Kochhar said BoR is a value buying and not a bailout proposition. BoR will add 3 million customers and start contributing to the profit of ICICI Bank from next year. "By diluting 3% equity , we are adding 25 % of more branch network at one go. BoR will augment ICICI Bank's loan book and deposits by around 8% each. We have now the largest number of branches among the private sector banks," she added. ICICI Bank's valuation of BoR is on the basis of Rs 6 crore per branch On BoR's sticky assets, Kochhar said, "We have verified all the details". Pravin Tayal, who was asked by RBI to dilute family's over 55 % equity to about 10%, said "no decision" has been taken on his representation the ICICI board after the merger. "I respect the amalgamation scheme decided by the Board," he said. With BoR board approving the swap ratio the proposal will now go to the Extraordinary General Meeting (EGM) slated on June 21, BoR director KN Bhandari said. Asked whether the merger will adversely impact BoR employees, Bhandari said, "All BoR employees will be retained and there will no job losses."
3. Standard Chartered on Sunday said it has fixed the price band for its proposed issue of 240,000,000 Indian Depository Receipts (IDRs) at between Rs 100-115 per IDR. The issue, which will remain openfrom May 25 to May 28, will raise up to $588 million. The bank has revised the target, which was earlier set at $750 million. Retail investors and eligible employees subscribing to the IDRs under the retail and the employee portion respectively, and whose bid amount does not exceed Rs1,00,000, will benefit from a further 5% discount to the final issue price, a bank statement said. Allotment of the IDRs is scheduled to be completed by June 7, with listing on the Bombay Stock Exchange and the National Stock Exchange shortly thereafter. In late March, StanChart said it aimed to raise at least $500 million and not more than $750 million in its IDR sale. Since then, London-listed shares in the lender have fallen nearly 9% amid a broader global selloff. Ten IDRs will represent one underlying share of the company, and the new shares issued in aggregate would constitute 1.16 % of its post-issue paid up capital,the statement said. "The issue of IDRs is a more brand-building exercise than capital mop up," the bank said. Capital Markets Ltd has been named as the co-book-running lead manager (co-BRLM). The Co-BRLM will only be involved in the marketing of the issue, the statement said.
