FIIs targets private banks

FIIs have brought in around 216 million over Rs 1,000 crore in the month of September alone, taking the total investment to 4.572 billion Rs 20,892 crore in the calendar year 2004.

A major acquisition is that of Barclays Capital, which acquired 4.3 per cent stake in UTI Bank from Citicorp Banking Corporation for Rs 135 crore.

On Thursday, Citigroup Global Markets and Goldman Sachs acquired stakes in Bank of Rajasthan. Citigroup acquired another 1.85 per cent stake to take its total holding to 4.74 per cent in Bank of Rajasthan. The deals were priced between Rs 36 and Rs 38 a share. The shares were bought from Solid Vision, a corporate investor, which held 4 per cent in the bank. In yet another deal on Wednesday, CLSA acquired 2.57 per cent stake in Kotak Mahindra for Rs 27.5 crore, while ABN Mauritius, the investment arm of ABN Amro acquired nearly 1 per cent in Kotak Mahindra for Rs 10 crore.

Vantobel Asset Management has also acquired over half a per cent in Jammu 038; Kashmir Bank for Rs 8 crore.

FII activity in private sector banks is expected to go up as RBI has come out with draft guidelines asking promoters to dilute their holdings in private sector banks to 5 per cent of the capital.

8216;8216;If the RBI implements the draft guidelines, equity of many private banks will be up for sale. Many FIIs have started zeroing in on such private banks,8217;8217; said a source in a broking firm. Promoters 8212; or main stakeholders 8212; in private banks like Federal Bank, South Indian Bank, ING Vysya Bank, Bank of Rajasthan, HDFC Bank and IndusInd Bank are thinking of diluting their stakes.