Sicom had already identified some potential partners, revealed officials."If Sicom has to grow steadily, we would need a substantial influx of capital to meet the stringent capital adequacy norms. Since the government is not in a position to contribute in a big way, we have decided to rope in external investors," officials said.

The idea was mooted by the state government to the delegates and potential investors at the US investment summit held here last month. It had received a positive feedback, the officials said.

The government currently holds 49 per cent in the institution, while the remaining equity is held by various investors including Unit Trust of India (UTI), HDFC, IL&FS, Jindal Holding, Finolex Finance and the Ispat Group. UTI alone holds around 40 per cent equity.

The quantum of dilution of the government stake is yet to be finalised, the officials said. Sicom is working on various aspects of the proposed divestment like the pricing and size of the issue.

The divestment is intended at widening the capital base of the institution to enable continuous growth as well as acquiring the expertise and technology of a global partner. This would prepare Sicom to achieve a viable size and the competitive edge for surviving in the opened-up financial sector.

"We need to acquire some global expertise and new technology to hold ground in the expected onslaught of competition in the near future, with the coming of the World Trade Organisation (WTO) norms," officials said.

The FI would look for partners from any segment of the financial sector including international banks and insurance companies.

Sicom has had a compounded annual growth rate (CAGR) of 35 per cent over the last five years and currently has an asset base of Rs 2,200 crore. It is planning to achieve a size of around Rs 10,000 crore in the next three to four years.

Sicom's strong points seem to be the 3,000-strong existing clientele, the ready infrastructure, local expertise along with close ties with the government.

"We will expand our business, and offer a wide range of new products like derivatives and forex services," they said.