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C.R. Sukumar

HYDERABAD, June 29

THE Dutch financial services major ING group has decided to further consolidate its equity holding in Vysya Bank to 49 per cent.

The ING group expressed its interest in increasing its holding to the Vysya Bank management, as the current regulations for foreign direct investment (FDI) in banking companies permit the foreign banks to raise their stakes in Indian peers to 49 per cent.

At a meeting held here, the Vysya Bank board considered the interest of ING and accorded its `no-objection' to the proposal, according to the Vysya Bank Corporate Secretary, Mr M.V.S. Appa Rao.

It may be recalled that the ING group had recently proposed to acquire 54.36 lakh fully paid-up equity shares of Rs 10 each of Vysya Bank, representing 23.99 per cent from GMR group, a privately-owned conglomerate.

These shares, proposed to be acquired at an average price of Rs 626.92 per share, would enable ING to enhance its holding to around 44 per cent in the bank from the existing level of 20 per cent.

The proposed acquisition of 23.99 per cent holding by ING through its wholly-owned subsidiary — Banque Bruxelles Lambert (BBL) Mauritius Holdings — was also approved by the Vysya Bank board.

In addition to the 23.99 per cent holding proposed to be acquired from GMR group, the Dutch financial services giant expressed its intention to acquire five per cent holding in Vysya Bank either through market transactions or negotiated settlement, Mr Appa Rao informed the regulatory bodies.

At present, GMR group and associates are holding 28.53 per cent in Vysya Bank and the institutional investors together hold 9.37 per cent. ING, through two of its subsidiaries, holds 20 per cent and the International Finance Corporation is holding a stake of 10 per cent in the bank.

While private corporate bodies have a stake of 6.57 per cent and NRIs and OCBs hold 3.24 per cent, the balance 22.29 per cent is held by the Indian public.

Meanwhile, the Vysya Bank board decided to reduce its equity stake in ING Vysya Life Insurance Company, the insurance joint venture between ING, Vysya Bank and GMR group.

Mr Appa Rao informed the regulatory bodies that the consequent redistribution of the equity shareholding among the partners in the joint venture company was currently being worked out in accordance with the applicable regulations.

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