WL Ross, Shinsei lead race for IFCI stake | business | Hindustan Times
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WL Ross, Shinsei lead race for IFCI stake

business Updated: Oct 02, 2007 22:20 IST
Arun Kumar
Arun Kumar
Hindustan Times
WL Ross

Consortiums led by Wilbur L Ross and Shinsei Bank are seemingly the front-runners among 10 bidders for a 26 per cent stake in IFCI, the country's oldest development financial institution.

According to highly placed sources, the top management of IFCI is of the view that roping a consortium partners would help the organisation in retaining its own identity, which is also the objective of this exercise.

"We do not want investors only eyeing lucrative financial assets and in the case of the consortium partners, individual members of the consortium would not have an active role to play," said a senior IFCI official.

The consortium led by WL Ross includes Standard Chartered Bank, Goldman Sachs and HDFC Ltd. The rival consortium led by Japan's Shinsei Bank includes US-based JC Flowers and state-controlled Punjab National Bank.

Sterlite and Morgan Stanley have also joined together to bid. Among the individual bidders are IDFC, GE Capital, Newbridge, Netixis and Blackstone Capital Partners still in the fray.

At a high-level meeting on Monday, it was decided to reject the bids of Cargill Finance and Kotak Mahindra, corporate sources said. "All the bidders left in the fray will be informed by the end of this week and they will be called for presentations by October-end," a source said.

Goldman Sachs is apparently very aggressive on IFCI after it acquired five per cent stake in NSE in January this year.

They have realised the inherent strength of IFCI and they have already acquired 3.2 per cent stake from the open market.

Since some of the overseas bidders are looking at an entry point through IFCI, the battle is expected to intensify further.

Sources close to the deal said the deal would cost the successful bidder over Rs 4,500 crore. The bids are expected to be over Rs 125 per share. At this price, the successful bidder will have to fork out over Rs 2,800 crore for 26 per cent and will have to set aside additional Rs 1,600 crore for the open offer of 20 per cent under SEBI's takeover norms.