UBS, EFF acquires stake in FedBank
UBS Securities Asia Ltd, the Hong Kong-based investment arm of the Swiss financial power house, UBS, and Emirates Family of Fund (EFF) promoted by the UAE-based Emirates Bank Group (EBG), have picked up less than 5% stake each in Federal Bank Ltd from the open market. This assumes significance as it comes at a time when ICICI Bank, the single largest stakeholder in the Kochi-based bank, is divesting its stake in tranches to bring down its holding to less than 5% to comply with the Reserve Bank of India (RBI) norms. Federal Bank does not have a domestic or foreign promoter and ICICI Bank originally held over 21% stake in the bank. It has recently diluted close to 10% stake in Federal Bank in the open market and leading foreign institutional investors FIIs) Goldman Sachs Investments and Kuroto Fund had picked up a sizeable chunk of its shares.
UBS Securities had acquired 31,48,944 shares aggregating 4.81% stake of the FedBank from the open market. UBS has reportedly bought these shares in tranches at market prices. Similarly, the EFF has also bought 22,54,20 floating shares aggregating 3.44% of the Federal Bank through open market operations. Following this, the total FII holdings in the bank has touched 26.43% in the December quarter compared to 15.5% in the previous quarter. UBS and EFF have been buying Federal Bank stocks for quite some time. UBS will have to soon make a public announcement as per the Sebi guidelines about its positions in the counter as its holding may soon cross the 5% mark. UBS is seen as a strong contender for a controlling stake in Federal Bank. Rumours were also doing the rounds that the UAE-based Emirates group was keen to get a controlling stake in Federal Bank, which has substantial business from the non-resident Indians (NRIs living in the middle east). Federal Bank is one of the largest old generation private banks in the country. It has clocked a profit of close to Rs 72 crore for the quarter ended December 2005 over a turnover of Rs 352 crore.