Markets welcome Pandit’s bank foray
The return of Vikram Pandit to India amid an expected flurry of new licences in the banking sector got a welcome salutetoday, as shares of his partner Nimesh Kampani’s JM Financial surged by 13%. HT reports.india Updated: May 18, 2013 01:43 IST
The return of Vikram Pandit to India amid an expected flurry of new licences in the banking sector got a welcome salute on Friday, as shares of his partner Nimesh Kampani’s JM Financial surged by 13% on news of the planned investment of R1,150 crore by the former Citibank CEO and his partner Hari Aiyer.
Shares of JM Financial opened higher at R26 against the previous close of R23.5 and closed the day at a 52-week high of R27 on Bombay Stock Exchange (BSE) on Friday. The company’s shares have surged by around 44% in the past three trading sessions.
“It (Pandit’s association with JM Financial) does increase the chances of getting a banking licence. He brings with him a substantial experience, and is a strong name in finance all over the world,” said Ashvin Parekh, partner and national industry leader for global financial services firm Ernst & Young.
Pandit became chief executive of Citigroup in 2007 and steered the company through the worst of the global financial crisis, but was removed unceremoniously from Citi late last year for undisclosed reasons.
Colleagues remember him as ‘extremely motivational’ leader. The deal with JM Financial is a result of 15 years of Pandit’s close relations with JM chief Nimesh Kampani, counted among top deal-makers of India.
“Kampani is among the best in the industry in terms of ideating on a deal and executing it,” said Motilal Oswal, chairman and managing director, Motilal Oswal Financial Services.
According to the deal, announced keeping in mind new banking licences, Pandit and Aiyer will investor close to $210 million in JM Financial and its two arms. RBI has started the process of new bank licences and set a July 1-deadline for receiving applications.