HSBC, which acquired 14.71 per cent equity in UTI Bank from CDC Financial Services and South Asia Regional Fund, on Wednesday said it will not increase the open offer price of Rs 90 per share to buy an additional 20 per cent stake.

It is also negotiating for adequate representation on the UTI Bank board and is keeping open the option of floating a subsidiary.

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A decision would be taken keeping in mind the regulatory regime in India, Michael RP Smith, CEO-designate of HSBC, said at a press conference.

HSBC India CEO Niall SK Booker said the foreign bank had no plans at present to acquire management control in UTI Bank. Asked whether the bank was eyeing acquisition of UTI Bank after norms were eased, Booker said, "We never rule out anything. If circumstances change and the regulator agrees, we can look at acquisition."

Smith said HSBC had a lot of confidence in the present management of UTI Bank and the $90 million investment was purely financial.

He said the decision reflected a new perception about the Indian market. "We have been in India for the last 150 years, but we are constrained to expand through organic growth. So we are looking at further investment within the existing regulations," he said.

Booker also said HSBC did not expect too many investors to subscribe to the open offer since the price of Rs 90 was lower than the prevailing market price of around Rs 115.

He said only around 16 per cent of the shares were with the public while the remaining was with investors like UTI, Life Insurance Corporation and General Insurance Corporation.

He, however, said HSBC would not enjoy the same kind of control as CDC did in the decision making process of UTI Bank.

"It is quite difficult to transfer the rights that CDC enjoyed but we will negotiate the issues with the other shareholders," he said. He further said HSBC and UTI Bank would work as two separate entities. Cross-selling of products could be explored in the interest of the shareholders, Booker said.

In a late evening development on Tuesday, HSBC said it would acquire 20 per cent stake in UTI Bank from CDC of which 14.71 per cent had been acquired for a consideration of Rs 306 crore (Rs 3.06 billion) with option to acquire an additional 5.37 per cent stake for Rs 112 crore (Rs 1.12 billion).

Smith said HSBC had identified India and China, where it has invested nearly $1billion so far, as long-term growth centres in the Asia Pacific region.