The Hindu : PNB Gilts scouting for strategic partners

Online edition of India's National Newspaper
Tuesday, Dec 10, 2002

Business

Business

PNB Gilts scouting for strategic partners

NEW DELHI DEC. 9. PNB Gilts is scouting for strategic partners including foreign banks for offering 26 per cent stake while awaiting Securities and Exchange Board of India's nod for carrying out merchant banking business.

Having got the Reserve Bank of India approval for diluting its stake to 30 per cent in three years, Punjab National Bank has allowed its primary dealer in G-secs to include a strategic partner who could bring in the international experience and technology.

"We are looking for a strategic partner who will bring with it the global outlook,'' the PNB Gilts Managing Director, Arun Kaul, told reporters here today.

The strategic partner could be a foreign bank or multi-lateral agency such as International Finance Corporation. "We have not started the nitty-gritties,'' Mr. Kaul said refusing to name the players that had evinced interest.

With more products coming into the market, making it more competitive and dynamic and at the same time complex, there is a need for higher capital adequacy, he said citing the need for strategic partners.

He said the company, in which PNB had 74 per cent stake, would be brought down to 49 per cent in the first phase of divestment and further to 30 per cent over three years from the date of notification.

However, he did not want to guess on the timeframe within which the partners would be roped in or the price at which the 26 per cent stake would be offloaded. PNB came out with an IPO for its subsidiary at Rs. 30 a share but the scrips of PNB Gilts are now quoting at around Rs. 22.

PTI

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