The Hindu Business Line : SBI Caps in alliance with CLSA

SBI Caps and CLSA will jointly work on large deals in equity capital markets, mergers & acquisitions and advisory space. The parties will also co-operate closely in research.

Mr A. K. Purwar (left), Chairman, State Bank Group,and Mr Rob Morrison, Chief Executive Officer, CLSA Ltd, at a press conference in Mumbai on Wednesday. - - Paul Noronha

Mumbai , Jan 18

SBI Capital Markets, the investment banking and project advisory subsidiary of State Bank of India (SBI), today entered into an alliance with CLSA Ltd, a leading international investment banking, brokerage and asset management group, for investment banking transactions in India.

The alliance will be converted into a full-fledged joint venture in future with equity participation by CLSA, said the SBI Group Chairman, Mr A.K. Purwar, while addressing a news conference here with Mr Rob Morrison, Chief Executive Officer, CLSA Ltd.

"The alliance will continue for a period of two years; it may be converted into a joint venture even earlier, depending on mutual convenience," Mr Purwar said.

As per the arrangement, SBI Caps and CLSA will jointly work on large deals in equity capital markets, mergers & acquisitions and advisory space. The parties will also co-operate closely in research.

For CLSA, which has been in India since 1994, the alliance with SBI Caps will be used to meet the investment banking needs of both Indian and international institutions. With a market share of about 20 per cent, CLSA is already the number one player in the Indian equity markets.

"The arrangement would benefit the clients of both the parties given the complementary strengths of each party. Along with its international investment banking expertise, CLSA will bring its institutional distribution experience and deal execution capabilities, while SBI Caps will contribute with execution capabilities, local distribution reach and the vast client base of the State Bank Group," said a joint statement.

Mr Indrajit Gupta, Managing Director & CEO, SBI Caps, felt the alliance would make a strong impact in the market. SBI Securities, the retail broking subsidiary of SBI Caps, was also on an expansion mode, he said.

From the present level of 22 branches, SBI Securities will have a total of 40 branches by March 2007, which will be further expanded to 100 branches in the next fiscal.

CLSA bullish on India: Mr Rob Morrison, CEO of CLSA Ltd, said the investment bank was bullish on India, in spite of "frustrations with bureaucracy and infrastructure (problems)."

"We remain positive on India," he said, adding that the country's economic growth and the earnings by the corporate sector make it a "favourite market". Mr Morrison also said the quality of management in India was superior, compared to other markets in the region.

The Hong Kong-headquartered CLSA has a presence in 11 Asian countries.

Mr Morrison said CLSA continued to hold "large overweight positions" on India, though the market had a good run in 2004 and 2005. "We remain positive in this market. The outlook is excellent," he said.