Argonaut Ventures, a private equity (PE) fund floated by US billionaire George Kaiser , has picked up close to 2% stake in Kochi-based lender The Federal Bank Ltd. Market sources said the PE firm had mopped up the shares from the open market through last quarter instead of going in for block deals. Besides the PE firm, HDFC has also picked up 1.15% stake in the bank through its investment vehicle HDFC Prudence Fund.
Argonaut, which has over $2 billion under its management and is currently scouting for investment opportunities in the Indian market, had earlier picked up close to 5% stake in the Chennai-based Shriram EPC Ltd. It had bought the shares from Golden Opportunities Fund for a consideration of Rs 185 per share. The fund?s portfolio in India include the Chennai-based Midas Technologies, textile retailer Koutons, Coimbatore-based KPR Mills, and a couple of venture capital start-ups such as VenturEast.
According to information available with FE, as of the latest quarter ending March 31, 2010, Argonaut Ventures is holding 25,08,654 shares, translating roughly into 1.5% stake in Federal Bank. Sources said the investment by the PE firm would not have any material impact on the bank immediately, and it could be purely a financial investment. Federal Bank stock closed on NSE at Rs 292, down 0.14%. The Rs 10 face value stock reached an yearly high of Rs 299.90 and a 52-week low of Rs 166.35. As of the quarter ended December 31, 2009, Federal Bank has posted a net profit of Rs 110.25 crore and a total business of Rs 1,061.12 crore.
As of the financial year ended March 31, 2010, the major stake holders in the Federal Bank are International Finance Corporation (4.99%), HSBC Financial Services (4.96%), LIC (4.88%), Emirates Financial Services (4.74%), L&T Capital Company Ltd (4.68%). The total institutional holding in the bank stood at 45.78% as of March 31, 2010.
