IFC has diluted its stake probably because it does not want to commit itself for the restructuring of the bank, Centurion Bank CMD V Janakiraman told FE.
IFC recently sold its 5.54 per cent equity holding in CBL in the open market and has brought down its equity stake to the level of 8.26 per cent in the banks equity of Rs 152.47 crore.
According to a market source, IFC may dilute its stake even further.
The financial institution has sold over 84 lakh shares of CBL between August 4 and August 22, 2003.
As a result, the total foreign equity in the bank has come down substantially to around 31 per cent from a little over 36 per cent earlier.
IFC is one of the three major foreign shareholders in the bank. Asian Development Bank (ADB) with 10.22 per cent equity holding and the foreign promoter Kephinance Investment (Mauritius) Pte Ltd with 17.71 per cent equity stake are the two other foreign investors in CBL.
The shareholders of CBL have already approved Sabre Capital Worldwides proposal of the fresh infusion of capital in the bank. The chairmans report on the meeting has been filed with the Goa bench of Bombay High Court and a formal approval is expected soon, Mr Janakiraman said.
He expressed his confidence that fresh capital to the tune of Rs 154 crore would flow in after the approval of the court and other regulatory authorities in the next three months.
The second tranche of capital infusion of about Rs 65 crore is expected to take place by way of rights and public issues by the end of December 2003, he said.
The tenure of Mr Janakiraman as CMD of the bank will end on January 3, 2004. On direction of the Reserve Bank of India (RBI), CLB has extended the term of Mr Janakiramans office for another period of six months with effect from July 4, 2003.