Syndicate Bank to set up VC, BPO subsidiaries

Syndicate Bank proposes to set up two subsidiaries — a venture capital fund of Rs 12.5 crore for rural development and a business processing outsourcing (BPO) unit at an investment of Rs 10 crore, D C Pai, general manager - treasury and international banking division, has said.

Addressing mediapersons on the follow-on equity issue of the Bank, Pai said a subsidiary will be set up in the form of an asset management company to promote the venture capital fund.

Total corpus of the venture capital fund is proposed to be Rs 12.5 crore of which Syndicate Bank will invest Rs 5 crore.

A UK-based venture company has plans to pick up a stake and a public sector bank has also evinced interest in investing in the company, he added. Pai said the bank expects to get approval from the Securities and Exchange Board of India (Sebi) by the end of July.

The Reserve Bank of India (RBI) has already given its approval to establish a venture capital to be formed as a trust.

The other subsidiary that the bank expects to set up is a BPO unit with an authorised capital of Rs 10 crore. “We have made an application to the RBI seeking approval to promote a wholly owned subsidiary to undertake BPO activities,” Pai said.

Syndicate Bank’s book-built issue will open on July 7 and close on July 13. The issue size is five crore equity shares with a face value of Rs 10 each through a second public offering.

According to the red herring prospectus, price band for the issue will be decided by the bank in consultation with the BRLMS and advertised at least one day prior to the issue opening date.