Local, foreign I-bankers split over PSU stake sale fees

MUMBAI: Domestic and foreign investment banks may appear united in public in their demand for fees from the government for managing share sales of state-owned companies. But, privately, domestic investment banks are nursing a grudge against their foreign counterparts; they complain that foreign investment banks are not vocal enough in their joint fight against the government for a fee to facilitate public offerings of state-owned companies.

The reason, according to domestic investment bankers, is that foreign banks recover the costs of free services for government share sales by providing participatory note and funding services to overseas clients, who invest in these public issues. The fee from these services helped foreign banks offset the expenses that they incurred while managing public sector share offerings in 2010-11.

Source: EconomicTimes