Singapore DBS buys stake in India's Cholamandalam
Thu June 16, 2005 8:12 PM GMT+05:30
Reuters India

SINGAPORE (Reuters) - DBS, Southeast Asia's biggest bank, will spend up to S$87 million ($52 million) for a major stake in Indian financial firm Cholamandalam to give it a foothold in the country's fast-growing consumer finance market.

DBS Group Holdings Ltd. said in a statement on Thursday it would acquire a stake of up to 37.5 percent in Cholamandalam, while Indian conglomerate Murugappa would reduce its 55 percent stake in the financial services firm to 37.5 percent.

Cholamandalam Investment And Finance Co. Ltd. sells car loans, insurance, mutual funds and offers financial services such as stock broking to institutional clients.

India's financial sector remains buoyant as its middle class grows, supported by annual economic expansion of nearly 7 percent, and as a new group of consumers for cars and other high-price items emerge.

DBS said it would buy the Indian firm's shares at 150 rupees ($3.44) each -- a 7 percent premium to Cholamandalam's average traded share price over the last two weeks and 1.82 times its book value at the end of March.

Rajan Raju, the head of DBS's South Asia and South East Asia business, said the purchase was in line with the bank's strategy of expanding in the region.

"We are particularly excited about the potential of the consumer finance business as our experience in Thailand with Capital OK has reaffirmed our confidence to serve the mass retail market, with quick and easy financing," Raju said in a statement.

He said DBS also saw great potential in serving affluent clients in the country.

DBS's move comes after Singapore's central bank last month reminded the city-state's banks that as wealth in Asia grows, opportunities for consumer banking, and financial and banking services will also rise.

DBS said it expected to close the transaction -- which is subject to regulatory and shareholder approval -- before the end of the year and that the investment would contribute to its 2005 profits.

The company, which has assets of S$182.27 billion, saw 33 percent of its net profit coming from abroad, with Hong Kong accounting for most of that.

Cholamandalam stock closed on Thursday 0.9 percent higher at 139.85 rupees, 7 percent below DBS' 150 rupee offer, while DBS stock ended 2.7 percent lower at S$14.20.

- Further coverage:

DBS Bank to buy stake in Chola Invt
Sify, India - 1 hour ago
Chennai: DBS Bank of Singapore will pick up a 37.5 per cent stake in Cholamandalam Investment and Finance Company of the Murugappa group. ...

DBS Bank to pick 37.5% in Chola Fin for Rs 228cr
Economic Times, India - 5 hours ago
CHENNAI: The Murugappa Group and the Singapore-based DBS Bank have struck a Rs 228-crore deal to be equal partners in Cholamandalam Investment and Finance ...

DBS to pick up 37.5% stake in Chola
Indian Express, India - 7 hours ago
CHENNAI, JUNE 16: Singapore-based DBS Bank on Thursday said it would pick up 37.5 per cent stake in the Murugappa group non-banking finance company ...

DBS to pay Rs 228 cr for 37.5% in Chola Inv
Business Standard, India - 8 hours ago
Singapore-based DBS Bank will invest Rs 228 crore to take 37.5 per cent in the Murugappa Group-controlled Cholamandalam Investment and Finance Company. ...

DBS Singapore To Buy 30% Of India Cholamandalam Invest
Yahoo News - 13 hours ago
MUMBAI (Dow Jones)--Singapore-based DBS Group Holdings Ltd. (D05.SG) is planning to buy up to 30% of Indian finance company, Cholamandalam ...

Singapore DBS buys stake in India's Cholamandalam
Reuters India, India - 13 hours ago
SINGAPORE (Reuters) - DBS, Southeast Asia's biggest bank, will spend up to S$87 million ($52 million) for a major stake in Indian financial firm Cholamandalam ...

DBS paying S$87m for 37.5% stake in Indian finance firm
Channel News Asia, Singapore - 14 hours ago
The bank is buying a stake in Indian financial firm Cholamandalam (CIFCL) for a foothold in the country's fast-growing consumer market. ...

SINGAPORE BUSINESS BRIEF:DBS Appoints SIA's Koh To Boards
Yahoo News - Jun 15, 2005
SINGAPORE (Dow Jones)--DBS Group Holdings (D05.SG) said it has appointed Koh Boon Hwee, chairman of Singapore Airlines Ltd. (S55 ...

DBS to buy 37% of Chola
Calcutta Telegraph, India - 7 hours ago
Mumbai, June 16: The Singapore's DBS Bank will pick up a 37.5 per cent stake in Chennai-based Cholamandalam Investment and Finance Company (CIFCL) in a deal ...

DBS to pick up 37.5% stake in Chola
Financial Express, India - 8 hours ago
CHENNAI, JUNE 16: Singapore-based DBS Bank on Thursday said it would pick up 37.5% stake in the Murugappa group non-banking finance company, Cholamandalam ...

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