Institutional interest in the Thrissur-based South Indian Bank (SIB), which does not have either a domestic or a foreign promoter, is on the rise and the latest to pick up stake in the bank are International Finance Corporation (IFC), Washington and Morgan Stanley through its arm Morgan Stanley Mauritius Ltd. Others including Swiss Financial Corporation had also picked up stake in one of the old generation private sector banks in the country. The total institutional holdings in the bank stood at 57.57% by the end of the third quarter of the current fiscal up from 45.81% during the previous quarter.
According to data available with FE, IFC, World Bank's industrial financing body, had picked up 2.99% stake in SIB during the third quarter of the current financial year. Morgan Stanley, similarly had mopped up 2.77% of the SIB's floating stock. Both the institutions had purportedly mopped up the stock of the bank from open market.
Similarly, Swiss Finance Corporation had picked up close to 2% stake in SIB. Other institutions which had picked up stake in the bank during the last quarter include FD Funds Mauritius which picked 2.77% in the Thrissur-based bank and UTI which had mopped up 2.71% stake.
However, India Capital Fund, which is the single largest stakeholder in the bank had brought down its holding in SIB from 10% to 7.74%. India Inc Fund also brought down its holding in SIB from 5.89% to 4.51%. Goldman Sachs also pared its stake in SIB from 4.75% to 3.71%. Federal Bank, which had picked up close to 5% stake in SIB triggering speculations of possible takeover attempt, had also diluted its stake in SIB to 4.14%.
Acacia Partners, which was holding 3.95% stake in SIB had brought down it stake to 1% while India Institutional Fund too pared its stake from 3.89% to 2.88% over the quarter. Merryl Lynch has partly diluted its stake in SIB from 2.84% to 2.34% while Argonaut Ventures lowered its stake from 2.25% to 1.75%. Citi Group Global Markets also brought its stake down to 1.5% from 1.92% in SIB.
According to analysts, the institutional interest in SIB may be driven by purely financial reasons and it may not have any material implication for the bank in the near future. “For now, the institutional interest in SIB may be purely financial and we don't see any material implication in the near future. This is evident from the fact that most of the institutions have partly sold their holdings to book profits.”
Source: Financial Express