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Our Bureau

Sees scope for M&As with robust SME growth

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Mumbai Feb. 1 Corus is a good buy for the Tatas and the concern that they may have overpaid is a natural reaction to any such deal, said Mr Peter Sands, Group CEO of Standard Chartered. "I have done several such deals when I was Finance Director (of Standchart) and every time someone would raise concern on the price," he said.

Mr Sands said infrastructure demand for steel will continue to grow in the fast growing Asian countries. Though steel price may face fluctuations, its demand in India, China and West Asia would continue to grow, as they would require large infrastructure investments.

`Encouraging'

Mr Sands, who is currently in India, said the Tatas' takeover of Corus could encourage more mid-cap Indian companies to buy assets overseas. Large Indian companies have been making overseas acquisitions, but there are medium-size corporates, which have the potential to go global but lack the confidence to seek out opportunities, he stated.

The Tata-Corus deal would encourage these companies, he pointed out.

He said the deal is just the beginning of the global journey that India Inc has just begun. "This (the deal) is not the summit, this is the base camp. There could be many more such deals in the coming days," he said.

Talking to a select group of journalists, Mr Sands said India, which accounts for roughly 10 per cent of the Stanchart's income, would continue to be a major market for the group.

"We have seen robust growth in SME sector in India," he said. This could provide new opportunity for M&A and cross-border deals.

On the recent sale of Stanchart asset management business in India to UBS, Mr Sands said India was the only country where the bank had asset management business, which was not the banks' core competency.

However, the bank would continue to distribute mutual fund products to customers, he said.

On a question as to whether the group would be raising the country limits on India, Mr Sands said such limits are meaningless.

"Resources for investments in a growing market like India have never been a constraint," he added.

More Stories on : Foreign Banks | Mergers & Acquisitions | Steel | Overseas Investments | Tata Steel Ltd

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