Blackstone Group LP, manager of the world’s biggest buyout fund, General Electric Capital Corp and a group led by billionaire Wilbur Ross are among 10 investors to bid for 26 per cent of the country’s oldest development financial institution, IFCI.
Ross’s group, including Goldman Sachs Group Inc, Standard Chartered Plc and Housing Development Finance Corp (HDFC), is vying with Cargill Financial Services Corp, Natixis SA and Newbridge Asia, IFCI said in a statement on Monday.
The winning bidder would get access to a market where lending grew 28 per cent last year, and where RBI limits foreign banks’ ownership of local private rivals to 5 per cent. IFCI, bailed out by the government in 2003 because of bad debts, in July announced plans to sell a stake to a local or overseas investor to bolster its capital. Other potential bidders include a group comprising Sterlite Industries (India) Ltd and Morgan Stanley, and a team consisting of Japan’s Shinsei Bank, Punjab National Bank and J C Flowers & Co, IFCI said. Kotak Mahindra Bank and Infrastructure Development Finance Company (IFDC) will also submit offers. “It gives entry into the financial sector, where foreign holdings are restricted.  Who ever gets control, they can clean it up,” said Birla Sun Life Asset Management’s Mahesh Patil .
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Meanwhile, IFCI Chairman N Balasubramanian has reportedly resigned on the grounds of conflict of interest, as he is also an advisor to Standard Chartered Bank, which is one of the consortium player to have participated in the bids.