Indian Bank to divest 20 pc of Govt equity

Bangalore, Feb 1 (UNI) With the capital market looking buoyant, public sector Indian Bank has decided to tap the market with an initial public offer (IPO) by offering 85.95 million shares of Rs ten each for cash at a premium to be decided through the book-building process.

Briefing newspersons as part of the Chennai-based bank's road show, bank Chairman and Managing Director K C Chakrabarthy said the price band for the bids, which would open for subscription on February five and close on February nine, had been fixed between Rs 77 and Rs 91 per share. The issue would be listed on both Bombay Stock Exchange and National Stock Exchange.

The offer constituted 20 per cent of the post issue fully diluted paid up equity of the bank. Thus post-IPO, the Union Government's hold in the bank would come down to 80 per cent, he said.

Mr Chakrabarthy said the bank had reserved ten per cent of the issue for employees and the rest for institutional buyers, mutual funds, non-institutional bidders and retail investors.

The tapping of the market was to augment the bank's capital base to meet future capital requirements arising out of implementation of the Basel II standards and grow its assets in sync with the growth of the economy, primarily its loan and investment portfolio, he said.

Indian Bank, which had come out of the red in 2002 after a bad patch for five years, had brought down its net NPA to 0.45, the lowest in the sector. Post-2002, it had made continuous profits.

UNI