The Hindu Business Line : SBI Caps in expansion mode

SBI Capital Markets Ltd, the full-fledged investment-banking arm of State Bank of India, is on expansion mode to increase its share of business in the domestic capital markets, mergers and acquisitions (M&As) and IPO segments.

The company plans to hire 200 executives in the next two years. It has hired over 100 executives in the last one year alone.

The company, which is advising several overseas governments in executing key infrastructure-related projects, is also looking to expand its international business taking advantage of the recently forged tie-up with Hong Kong-based CLSA Ltd, Mr Indrajit Gupta, Managing Director & CEO of SBI Cap, said.

"In the last one year, we have recruited more than 100 executives, which is huge number. Very few consultancy companies have (a total of) 100 executives while we have crossed 300 people. In the next two years, we will have over 500 people," he said.

Creating knowledge base

SBI Cap is also looking to explore the opportunity of building a knowledge base on various industries by collating decades' long records and data available with its parent SBI, he said. "To begin with we are trying to use these available records for use to our clients. But at a later stage, we can compile these data available with SBI into a compact user-friendly form. This can be made available for venture capitalists or others who want to put their money into various industries," Mr Gupta said.

He pointed out that State Bank of India, which has been lending to a host of domestic industries over the past several decades, have a minefield of data on various domestic industries. These records can throw light on the industry cycles, past performances and track records of managements among other things, which could be compiled to build knowledge base such as those provided by multinational consultancy firms like McKinsey, Mr Gupta said, explaining his future plans.

International projects

On the international projects, he said SBI Cap was advising the Government of Oman on two projects - a water desalination plant and distribution of filtered water. It was also advising the Government of Botswana for setting up a power plant, besides involving with a hotel project in Oman for the private sector. SBI Cap was also expecting a mandate from the Government of Qatar for a steel plant and another mandate from the Government of Maldives for the setting up of a bridge connecting two islands in the archipelago, he said.

On the capital market side, Mr Gupta said SBI Cap handled 692 public issues so far (from 1989) and the number was expected to touch 700 by June 2006. At present, its ranking is sixth among domes

In the M&A space, the company was involved in 60-70 deals, below its competitors such as DSP-Merrill Lynch, JM-Morgan Stanley and Kotak Mahindra. With the tie-up with CLSA, things would be much better going forward, Mr Gupta said.

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