Videocon has applied for a banking license yesterday by partnering with Citystate Holdings, part of the US-based Liberty Mutual Insurance group, says CMD Venugopal Dhoot. The group has been scouting for an international partner for the venture and is said to have set aside Rs 1000 crore for banking foray. The Reserve Bank has set a deadline of July 1 to receive banking licence application and chalked out stringent rules to be eligible.
In his interview with CNBC-TV18, Dhoot also threw some light on the just concluded Mozambique deal and his outlook on the oil business.
Below is the edited transcript of his interview with CNBC-TV18:
Q: The market was quite excited to hear about your plans for applying for a banking license. Could you confirm that first and whether or not indeed you are also looking at roping in a foreign entity as part stakeholder in that?
A: We have already applied for banking license yesterday and we have been very successful in our insurance arm. We are having Liberty as our partner which is the 5th largest company in insurance in the world. From that we have taken inspiration and we have applied yesterday for the banking license.
A number of foreign banks are interested to invest with us. There are Non-Resident Indian (NRI) groups and big industrial groups also. As a promoter we will be joined by many classes - art, science, film and all the industries, some of my friends will be taking 1-1 percent. So this is the way we have organised this bank matter.
Q: Can you share some names with us of these notable worthies that you are speaking about including global financial institutions?
A: There are many. We have not finalized and as you must have seen the RBI application form that once you give the application then you should talk about that. So I think I should avoid that question today.
Q: Post the conclusion of the Mozambique deal do you plan to capitalise on some of your Brazilian assets as well in the same way that you have done with Mozambique?
A: Mozambique and Brazil are two different stories altogether. Mozambique is too small a field compared to our Brazilian assets. The valuation of Brazil today is more than Rs 40,000 crore and we have various oil fields in Australia, Timur Sea, Indonesia. So all these assets are very good and we would like to develop.
Let me give you an idea about Videocon's oil and gas business. What we do is that we go into exploration, we develop it and some of the field we convert into production field and as soon as the production field is there we sell it or some of the production field we continue. This is the method we follow. One more thing I’d like to say here is that everywhere across the globe the success rate in such type of business is 20 percent but Videocon has been extraordinarily lucky in this and has achieved a success rate of 80 percent.
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