SBI Capital Markets (SBI Caps), the merchant banking arm of State Bank of India (SBI), is in final rounds of talks with foreign merchant bankers for a strategic alliance.
Although Janki Ballabh, the chairman of SBI, declined to name the overseas merchant bankers, he said a final decision would be reached in a couple of months. SBI Caps is currently in the news on account of its role on behalf of financial institutions in Modi Rubber.
The company is at present servicing domestic clients only. The tie-up will help SBI Caps in bagging assignments for foreign clients and the modalities of such arrangements are also being worked out.
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"SBI Caps is doing reasonably well, but it requires special expertise in certain areas for which we are open to partnerships," said Ballabh.
The alliance will also help SBI Caps bag advisory assignments against foreign merchant bankers operating with local partners in the country.
Last year, the bank consolidated its position as a full service investment banker, both in fund raising and advisory services. Engaged in infrastructure advisory project, the company continued its operations with a number of projects bagged from domestic operators.
The company was engaged as advisor/arranger for projects such as the water supply project in Tripura -- a built, operate and transfer project for the national highway at Durg -- and piped gas distribution in Delhi.
In merger and acquisitions, the company has acted as advisory to navratna companies. The company was also engaged in advisory assignments such as business restructuring, valuation, financial consultancy and privatisation. SBI Caps has also advised an oil sector public sector company in overseas acquisition.
The company recorded a profit after tax of Rs 31.47 crore in 1999-2000 and paid a 20 per cent dividend. SBI holds Rs 50 crore in SBI Caps as equity which is 86 per cent of the company's equity capital.