The Hindu Business Line : Federal Bank picks up stake in South Indian, LVB

Federal Bank has picked up 4.99 per cent stake each in South Indian Bank and Lakshmi Vilas Bank, it is reliably learnt. Sources said that Federal Bank was "gearing up for 2009", (when ownership of banks is expected to be liberalised.)

As of December 31, Federal Bank was holding 3.94 per cent in South Indian Bank. Federal's purchase must have been at least partly responsible for the rally in the prices of South Indian Bank's shares, which rose to Rs 100 from around Rs 70 in a fortnight.

South Indian Bank was attracting the attention of FIIs also. According to sources, the FII holding in the bank has risen to 35 per cent now. The other larger buyer of the bank's shares was Acacia Partners LP, which raised its stake from 3.95 per cent as of December 31, to around 4.5 per cent now.

(Incidentally, Acacia Partners has over 4 per cent stake in City Union Bank and close to 2 per cent stake in Karur Vysya Bank. The private equity fund is reported to have told bankers that it believed Indian Bank stocks to be undervalued.)

Moreover, Macquarie Bank of Australia, which had 3.44 per cent stake in South Indian Bank, was also said to have bought more shares, sources said.

More Stories on : Mergers & Acquisitions | Private Banks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Reconstruction co to have foreign partners

Federal Bank picks up stake in South Indian, LVB