The Hindu : ING to raise stake in Vysya Bank

Online edition of India's National Newspaper
Friday, Jun 21, 2002

Business

Business

ING to raise stake in Vysya Bank

By Our Staff Correspondent

MUMBAI, JUNE 20. The ING Group has announced that it proposes to purchase additional shares in Vysya Bank Ltd. from the GMR group for Rs. 340.80 crores. ING is proposing to enter into an agreement with GMR to purchase 23.99 per cent of total voting shares or 5.44 million fully paid equity shares of Vysya Bank at a price of Rs. 626.92 per share.

The total shareholding of ING on completion of the transaction will be 43.99 per cent of the total voting shares of Vysya Bank. This would be the largest foreign direct investment by a bank into an India bank and is the first under the newly increased 49 per cent cap on foreign direct investment in Indian banks. The investment will create the first Indian international bank. The transaction is subject to various regulatory approvals including from the Reserve Bank of India, the Insurance Regulatory Development Authority and the Foreign Investment Promotion Board.

As the transaction contemplated by the parties is the transfer of shares from the promoter of Vysya Bank to a foreign collaborator who is also a shareholder, it is exempted from the public offer requirements under the provisions of the SEBI Takeover Code.

By increasing its shareholding in Vysya Bank, ING believes it will be able to work more closely with the management to grow Vysya Bank's business potential to the mutual benefit of its customers, shareholders and employees.

ING's close relationship with Vysya Bank, the successful launch of its life insurance joint venture ING Vysya Life in 2001, and the further potential it believes Vysya Bank offers to its shareholders, have prompted ING to propose an increase in its current shareholding in the bank. ING now owns a 20 per cent shareholding in Vysya Bank through its subsidiary BBI.

"The objective of the GMR group in reducing its stake in Vysya Bank lies in its strategy to focus on its core areas of business — infrastructure, IT and agri business. However, the GMR group will still continue to hold a significant stake and play a key role in shaping Vysya Bank's growth,'' said Kiran Gandhi, executive director, GMR Group. The group also holds a 25 per cent stake in ING Vysya Life.

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