UTI to raise $1 bn for overseas biz

Mumbai, Jan 5 | Updated: Jan 6 2006, 06:00am hrs
With a view to fund its overseas operations with its first offshore banking branch at Singapore, private sector UTI Bank is planning to raise up to $1 billion through the medium-term notes (MTN) route over a period of two years.

It plans to open its first overseas branch in Singapore in the next month to offer offshore and merchant banking services to help Indian companies raise capital overseas. The bank's chairman and managing director, PJ Nayak said. The MTN route facilitates large borrowing programme in tranchets. We need to estimate over a two year period as to how much amount is needed to raise through the MTN route. We would also periodically keep remitting capital from India for our Singapore operations. The bank is also getting its MTN issuances rated by Standard and Poor and Moody's rating agencies.

Further in a bid to capitalise on the growing intra-Asian trade, the bank is planning to build a strong branch network in the Asian countries, for which it is awaiting the approvals from the governments of the respective countries.

Dr Nayak also said that the bank is looking only at organic mode of growth and is not relying on the inorganic route. The bank also plans to float an asset management company (AMC) to roll out an infrastructure fund, for which it is awaiting the RBIs approval. The bank has also tied up with Doha Bank and many exchange houses in UAE to keep pace with the growing remittance business from the Middle East countries.

He further said, With a capital adequacy ratio of 11.6% as on September 2005, the bank is facing no immediate need to raise Tier-I capital. However, when we had tapped the GDR route in March last year, we had planned not to dilute our equity base for the next three years. Whether we can keep up with the three-year period is a challenge for us.