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BULGE bracket investment banks such as UBS, Goldman Sachs, Deutsche Bank, Lazard and Citi are making a beeline for bagging a slice of the business arising out of the disinvestment process.
According to a senior official in the department of disinvestment (DoD), top officials of these financial services majors have met the disinvestment department and evinced interest to work as merchant bankers and investment advisors.
Investment bankers feel that some PSUs, especially in the steel & power sector, could attract a lot of international investors and that they (the bankers) could leverage their global relationships with clients and investors alike to execute these mandates successfully.
"Also, there are a lot of private equity funds that are looking at turnaround cases (pushing revival plans for sick PSUs). Sick Indian PSU units could be a prime target for such investors," said a senior investment banker speaking on condition of anonymity.
The Cabinet has already approved the listing of two PSUs — NHPC and Oil India. It is expected that clearance for public issues for other companies, such as aviation biggie NACIL, telecom major BSNL and Cochin Shipyard, may materialise soon.
"Some of these companies have presented their case citing their global experience. They have also shown interest in getting private equity players and strategic investors in case of sick public sector units," said a DoD official requesting anonymity.
As per the current disinvestment policy, the government is only looking to offload its stake in public sector companies through public offers. "As of now, strategic sale in PSUs is not approved. But, if these international bankers can bring private investors like Wilbur Ross for SpiceJet, it may be a good move to revive ailing PSUs," said the official.
Pitching for public sector mandates helps investment banks show diversity in their portfolio of work and enables them to build relationships with the government.
However, from a fee income perspective these might not be the most lucrative mandates, as the government typically chooses the lowest bidder offering to act as advisor.
PITCHING HIGH
UBS, Goldman Sachs, Deutsche Bank, Lazard and Citi are eyeing business arising out of the disinvestment process
I-bankers feel that some PSUs, especially in the steel & power sector, may attract a lot of global investors, and bankers could leverage global relationships with clients, investors
The Cabinet has approved the listing of two PSUs — NHPC and Oil India
According to a senior official in the department of disinvestment (DoD), top officials of these financial services majors have met the disinvestment department and evinced interest to work as merchant bankers and investment advisors.
Investment bankers feel that some PSUs, especially in the steel & power sector, could attract a lot of international investors and that they (the bankers) could leverage their global relationships with clients and investors alike to execute these mandates successfully.
"Also, there are a lot of private equity funds that are looking at turnaround cases (pushing revival plans for sick PSUs). Sick Indian PSU units could be a prime target for such investors," said a senior investment banker speaking on condition of anonymity.
The Cabinet has already approved the listing of two PSUs — NHPC and Oil India. It is expected that clearance for public issues for other companies, such as aviation biggie NACIL, telecom major BSNL and Cochin Shipyard, may materialise soon.
"Some of these companies have presented their case citing their global experience. They have also shown interest in getting private equity players and strategic investors in case of sick public sector units," said a DoD official requesting anonymity.
As per the current disinvestment policy, the government is only looking to offload its stake in public sector companies through public offers. "As of now, strategic sale in PSUs is not approved. But, if these international bankers can bring private investors like Wilbur Ross for SpiceJet, it may be a good move to revive ailing PSUs," said the official.
Pitching for public sector mandates helps investment banks show diversity in their portfolio of work and enables them to build relationships with the government.
However, from a fee income perspective these might not be the most lucrative mandates, as the government typically chooses the lowest bidder offering to act as advisor.
PITCHING HIGH
UBS, Goldman Sachs, Deutsche Bank, Lazard and Citi are eyeing business arising out of the disinvestment process
I-bankers feel that some PSUs, especially in the steel & power sector, may attract a lot of global investors, and bankers could leverage global relationships with clients, investors
The Cabinet has approved the listing of two PSUs — NHPC and Oil India
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