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StanChart sees growth in India M&A financing, margin pressure

StanChart sees growth in India M&A financing, margin pressure
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First Published: Tue, May 24 2011. 05 39 PM IST
Updated: Tue, May 24 2011. 05 39 PM IST
Mumbai: Standard Chartered is looking to tap a bigger share of the acquisition-related financing in India, a senior executive said on Tuesday, as companies aggressively look for large buyout opportunities in the overseas markets.
But the Indian banking sector’s margins will be squeezed as stiff competition among the global and local banks put pressure on pricing of corporate loans, V. Anantharaman, co-head for wholesale banking at Standard Chartered in India, said.
Standard Chartered, whose India operations account for the biggest share of its profit, offers corporate financing and a range of other services including investment banking and trade finance in the wholesale banking segment.
“That’s a huge area of growth,” Anantharaman told Reuters in an interview, referring to the M&A financing. “Having said that, it is not something which is open just for us. It is a very, very competitive market out there.”
Standard Chartered, a commercial bank not scarred by the global financial crisis, is viewed by many rivals in India as the most aggressive packager of merger advice with its balance sheet.
The UK-based emerging markets specialist was lead adviser to Bharti Airtel in its $9 billion buy last year of Zain’s Africa operations and provided about $1.5 billion in finance, the largest chunk.
It is also the joint lead adviser and part of a consortium that has agreed to lend about $3.5 billion to Vedanta Resources, a India-focused miner, to help pay for its planned $9.6 billion acquisition of oil and gas firm Cairn India.
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First Published: Tue, May 24 2011. 05 39 PM IST
More Topics: Standard Chartered | India | Mergers | MAs | Banking |