The country?s second largest commercial bank, ICICI Bank, has formed a new strategic business unit (SBU) called the Global Client Group to cater to the globalisation needs of the top 50 companies in India.
The funding of overseas acquisitions by Indian companies has hitherto been a virtual monopoly of foreign banks operating in India.
ICICI Bank recently decided to add the seventh SBU to its existing six after realising the huge potential of such business. Of late, there has been a surge in the number of corporates seeking M&A advisory services and funding. ICICI Bank apart, State Bank of India, the country?s largest bank, has also begun aggressive M&A funding.
Speaking to FE, Sanjay Chatterjee, ICICI Bank?s senior general manager & head of North America and Europe operations, who is also chief of the new SBU, said: ?Today, some of the top corporates are highly aggressive in their global plans. The bank has formed this new unit to provide a single window for all their business needs.??
Since extant RBI regulations do not permit Indian banks to fund overseas M&As from their local balance sheet, ICICI Bank is channelling its overseas funding through its international operations headquartered in the UK.
In the recent past, the bank has part-funded some of the largest overseas deals by India Inc, including the Tata-Corus deal, the UB buyout of Whyte & Mackay, and other deals by Tata Chemicals and Tata Tea. ?The bank has already run up an exposure of over $1 billion in deals involving overseas M&A plans of some of the largest Indian companies. We have also lined up a few more such deals for the current year,?? Chatterjee said.