Axis Bank MD and CEO Amitabh Chaudhry has said that the bank plans to enter the merger and acquisition financing in a big way following the Reserve Bank of India’s (RBI) proposal for a framework for domestic banks to finance acquisitions.
“We are the biggest players in bond and loan syndication.
We will give all the foreign banks a run for their money who have been financing these acquisitions for the last several years,” he said on the sidelines of the Global Fintech Fest. “We want to bank with all the major corporates in India,” he added.
RBI, while announcing the outcome of the monetary policy committee on October 1, proposed to provide a framework for Indian banks to finance acquisitions by Indian corporates, which would expand the scope of capital market lending by banks.
What did Chaudhary say?
While Chaudhry did not mention the segments the bank would focus for funding acquisition of corporates, he said that it would depend on “what is the acquisition is, who is acquiring, and what are the cash flows.” After the announcement by the central bank, analysts commented that the decision would have a impact on the private credit segment, to which Chaudhary said, “Private credit is not a competition. It’s too small in India at the moment.”
On the forms of business circular, Chaudhry said that RBI may give more time to banks to sell their stake in their subsidiaries who are in the same line of business. He said that they are waiting for the final guidelines to reduce stake in their subsidiary- Axis Finance.
Axis bank aimed to raise Rs 2,000-4,000 crore through disinvestment
“Let the circular come. We have to raise money now for it (Axis Finance). The impression I get is they (RBI) will give more time to banks to manage this whole process rather than pushing us to sell in a shorter period of time. But, directionally, nothing might change,” he said.
Axis Bank was exploring a stake sale in its subsidiary Axis Finance, aiming to raise between Rs 2,000-4,000 crore through the divestment. On the National Stock Exchange, the shares of Axis Bank closed 2% lower at Rs 1,188 on Tuesday.