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Barclays to expand franchise, product portfolio

August 17, 2006 12:55 IST

As part of its expansion drive in the high-potential Indian financial services market, Barclays Bank plans to pick up a 10 per cent stake in asset reconstruction company, ARCIL, from domestic banking major ICICI Bank.

"We intend to expand our operations in India where we are already a leading player in debt raising for Indian corporates as well as in risk management. The ARCIL move is a part of our entry strategy into the Indian market," Barclays Capital Managing Director-Investment Banking Raju Shukla told PTI.

Barclays is a leading player in the Asian asset reconstruction market space and our foray into India is an extension of our expertise into the country, Shukla said.

The stake pick-up in ARCIL, is, however, subject to regulatory approvals being obtained and "our Indian office is presently pursuing this," he said, adding that it would not be possible to disclose the valuation of the deal at this juncture.

Describing ARCIL as the most active company in the distressed markets space in India, Shukla said acquisition of a stake in the company will enable Barclays to better understand the dynamics of the Indian market.

A major player in the Indian debt market, Barclays has raised over $2 billion in the last two years for Indian corporates, including $250 million in January for NTPC in the form of a 10-year bond issue and $150 million for UTI Bank a few days ago.

Going forward, Barclays, which committed $150 million incremental capital into its Indian operations in March this year, plans to expand its franchise and product portfolio in the Indian market.

"We have already committed $250 million in the last two years into the Indian market," he said.

Barclays will continue to intensely focus on its domain of raising syndicated loans, bond issuances and risk management even as it expands its operations in the country.

Asked whether Barclays had any plans to pick up strategic stakes in any Indian bank, Shukla replied in the negative. "We have no such plans at present," he said.

If the ARCIL deal goes through with Barclays, ICICI Bank's holding in ARCIL will come down to around 19.5 per cent. Other major stakeholders in ARCIL are IDBI, State Bank of India and the Citigroup.

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