Feb 4, 2000|
ICICI to set up a holding company for its internet ventures
ICICI plans to set up a new holding company for its internet related ventures. This would include its payment gateway, which was recently announced and other e-commerce areas in lines of the US major CMGI Inc.
ICICI is India's second largest institution, with a major presence in almost all areas of finance. The company has an asset base of Rs 585 bn.
This will be a fully owned subsidiary of ICICI initially, and ICICI will later on raise funds by getting this subsidiary listed on NASDAQ and/or place its shares with strategic foreign partners. CMGI Inc., is in the business of creating and managing the largest and most diverse network of internet companies in the world. It aims to have the CMGI type structure for this holding company which would be divided into four sub-groups of marketing and advertising, content and community, e-commerce and enabling technologies companies. This would help ICICI maximise value from all its internal in-house portals and consolidate all internet related companies in a synergistic structure.
ICICI has already announced its joint venture with Satyam Infoway for e-retailing, a web trading portal and an e-commerce payment gateway with Compaq Computers Corporation. It is also planning to set up other financial and non-financial portals in future. As the internet boom in India has started, this move by ICICI can be seen as its aim of becoming one of the biggest players in the internet business. Also as ICICI has been very aggressive on its retail financing front, the medium of internet would be extremely useful to it for tapping the growing retail market in India.
The key to future growth in both the banking and finance sector will depend on their ability to use technology and net to their best advantage. The cost of delivering products on the internet is lower as compared to traditional ways, hence ICICI is encashing on this by providing both financial and non-financial products.
ICICI has been rated a 'Buy' by many analysts due to its restructuring, its high spends on technology and manpower which has helped it retain quality manpower and its aggressive retail expansion.
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