Wednesday, June 18, 2008
Religare plans banking foray
NEW DELHI: Ranbaxy promoter group's financial services company
Religare Enterprises is looking at foraying into banking sector. The
company is exploring both organic and inorganic route, when the sector
opens up, for the venture. Incidentally, the company acquired a 4.2%
stake in Karnataka Bank in the last quarter of 2006 and this is the
only bank where Religare has invested so far.
At the end of the quarter ended March 31, 2008, there were 14
institutional shareholders holding a total of 41% stake in the bank.
US-based Oppenheimer Funds Inc is the highest shareholder with 4.94%
stake. The shareholding of this bank is widely disbursed, and it does
not have a promoter.
Religare is keeping its option open of increasing its stake in the
bank if it gets the regulatory nod. Says Religare Enterprises CEO and
MD Sunil Godhwani: "Karnataka Bank was the first bank in which we
invested. The company has advisory and other financial services
relationship with Karnataka Bank among other banks. But, Karnataka
Bank is the only bank in which we have picked up stake."
"We are offering all banking-related services except issuing cheques
and taking deposits. The group has been looking at foraying in banking
segment as it will complete our financial services. However, the
venture should be feasible and add value to the shareholders,
bottomline and the company's overall business. We are looking for the
market to open up," he added.
Under the existing regulations, a corporate entity cannot buy more
than 10% in a bank. Banking licences are hard to get in India and
Religare has also not applied for a banking license.
Mr Godhwani said the company has recieved investment options in
several banks but has not yet zeroed it down to any particular bank.
According to industry sources, Religare may invest a significant
amount of Rs 10,000 crore which the promoter family will get for
selling its 35% stake to Japanese company Daiichi Sankyo in its
banking foray.
Market watchers say that Religare has been looking at acquiring a
significant stake in a bank as the company needs one to expand its
financial services business.
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