IndusInd Bank looks for mid-sized private sector bank to acquire

After acquiring Ashok Leyland Finance two years ago, mid-sized private sector bank IndusInd is scouting for fresh acquisitions. This time it is interested in acquiring a similar sized private sector bank. CNBC-TV18 reports on IndusInd''s strategy to catapult itself into the big league.

According to bank officials, several investment banks are eager to find IndusInd a suitable prospect. Investment banking sources said that Karnataka Bank, Catholic Syrian Bank and South Indian Bank might be on the list of takeover targets for IndusInd.

However, Karnataka and South Indian Bank said they are currently not looking to sell out and Catholic Syrian Bank did not respond to queries. All three banks meet the IndusInd''s requirements as all of them have 250 to 400 branches in the south and a high current and savings accounts ratio.

"Several investment bankers have made presentations to us and are looking for something for us," says Bhaskar Ghose, managing director, IndusInd Bank. "We are very clear, we want to acquire a bank which has a high CASA ratio and which will add to our branch network."

Acquiring a mid-size private sector bank will come at high valuations; IndusInd may have to pay anywhere close to Rs300 to Rs400 crore. Though Ghose says that the bank would consider a GDR, it prefers diluting the promoter''s stake in favour of foreign banks as it has enough suitors.

"We want a foreign bank as that would give us a brand name and expertise, which is important for us," Ghose adds.

IndusInd said it will look at completing the acquisition before April 2009, when the banking sector is likely to be open to foreign competition, Acquiring a mid-sized bank will help give it the much needed size and scale.