Another US fund hikes stake in SIB

Chennai, Nov 29 | Updated: Nov 30 2006, 09:10am hrs
The India Fund, Inc (IFI), a closed-end fund managed by the Blaskstone Group of the US, has increased its stake in the Thrissur-based South Indian Bank (SIB) to over 5%. Another US fund, India Capital fund had hiked its holding in the South India Bank to close to 10% a couple of months ago. SIB is one of the old generation private sector banks and does not have any Indian or foreign promoters.

Market sources told FE that IFI has hiked its stake in South Indian Bank from 3.26% during the September quarter to 5.02% as of November 27. It has acquired the additional stake in SIB from the open market. SIB stock closed on NSE at Rs 76.15, up by 4.1% on Wednesday.

Another US fund, India Capital Fund during the September quarter has hiked its stake in South Indian Bank to 9.63%, from 7.59% it was holding during the June quarter. Following this, the US Fund has become the single largest stake holder in South Indian Bank.

The other two largest stake holders in SIB are Goldman Sachs Investment, which has a 4.76% stake and the Kochi-based Federal Bank Ltd which had picked up a 3.62% stake in SIB a couple of months ago. The buying of Federal Bank into the South Indian Bank stock had triggered speculation about a possible takeover bid of SIB by the Federal Bank. Federal Bank had to call off its merger talks with another Kerala-based bank, Lord Krishna Bank, some times back over differences in valuation.