TVS plans to hive off logistics arm

1st December 2004: TV Sundram Iyengar and Sons (TVS), the parent company of the $2bn TVS group, is set to hive off its fast growing logistics business as a separate company – TVS Logistics Services. The new entity with a paid up capital of Rs 12 crore and fully-owned by the parent, will quickly ramp up its operations in India and abroad through join ventures in Europe and Asia, besides alliances in US. Next year, its overseas operations are expected to fetch Rs 100 crore.

IOB is enthusiastic on takeovers

30th November 2004: After being prompted by the ministry of finance (MoF), Indian Overseas Bank (IOB) has started looking for an acquisition. The bank, which was eyeing organic growth, has refocused itself to inorganic growth. The bank is open to the idea of taking over both public sector and private sector banks. However, the bank has ruled out taking over a weak bank. IOB also plans to launch a financial services subsidiary to cater to the broking business. In addition, it is planning to open representative offices in the UAE, Malaysia and China to expand its horizons beyond the frontiers. S C Gupta, chairman and managing director of the bank, confirmed this.

Mr. Gupta said, “We have started looking for inorganic growth seriously. This is being done in order to face challenges thrown open by tightening of prudential norms by the RBI as well as implementation of Basel-II among Indian banks.” He added that the names and the structure would be clear only by early February. “We are not in a hurry. We are waiting for the right deal to come to us that would bring value to our shareholders. Of course, we want the identity of our bank to be retained,” he said. The financial services subsidiary would come into existence before the end of this fiscal. “We will have the subsidiary operational by March 2005,” explained Mr. Gupta.

The bank paid an interim dividend of 14% (Rs 46.50 crore) to the government. “You can have a look at our progress. The balance sheet size has grown from Rs 32,000 crore in March 2000 to Rs 67,000 crore in September 2004. Our organic growth has been among the top. We plan to grow further up by crossing Rs 72,000 crore by March 2005,” Mr. Gupta explained.

Indian Bank eyes M&As, IPO route for expansion

29th November 2004: Indian Bank has coined a consolidation strategy that involves growth by way of acquisitions and also a public issue offering. The bank is open to acquiring either a public or private sector bank that offers greater synergy of operations.

Indian Bank chairman and managing director M B N Rao said, "We are evaluating both the options. The public issue should come out in a year." The bank is looking at both acquisitions as well as an IPO, he said. An internal bank team is involved in scouting for acquisition targets. It is believed that the bank is looking at consolidating its market position in west and north India. The target banks could be those having a major presence in these regions. The bank is expected to take the proposal to the government once it formalises its plans. Internally, the bank has taken several steps to reduce its NPAs to 2.25% riding on high cash recoveries. The bank's net NPA has climbed down from Rs 754 crore last to Rs 359 crore as on September 2004. The bank has also formulated a plan that involves doubling its business size from Rs 50,000 crore to Rs 100,000 crore in 2007. The bank has particularly stepped up focus on agri lending and it proposes to double the figure by 2007.

Mr. Rao said, "we have hired 100 agriculture graduates, tied up with tractor companies (Tafe and M&M) for easy finance and scaled up finance for paddy and sugarcane growers. In AP, we have added 247 new farmers per branch as part of our agri advances." The bank has also decided to adopt core-banking package, to be implemented by TCS, for its 500 branches. "We have already conducted a pilot project in two branches of Tamil Nadu," he added.