Indian Bank plans IPO of Rs800-Rs1200 crore early next year
By Our Banking Bureau | 16 Oct 2006
Mumbai: Indian Bank has proposed an initial public offer (IPO) of 89 million shares, to raise Rs800-Rs1200 crore to raise its capital base and support business expansion, by January-end or first week of February next year. "About 89 million shares will be offloaded at a price to be decided through the book-building process," a senior Indian Bank official said.
The Chennai-based bank had an initial paid-up capital of Rs743.82 crore. Of this, the bank had converted Rs400 crore into non-cumulative preferential shares and placed them with the government. Post restructuring, the bank''s paid-up capital now stands at Rs343.82 crore or 343.82 million shares.
Indian Bank will pay an interest of eight per cent per annum on the preference capital.
The IPO constitutes about 25 per cent of the bank''s paid-up capital of Rs343.82 crore.
Post IPO, the government holding in Indian bank will come down by 25 per cent to 75 per cent.
Indian Bank chairman A K Chakrabarty said the amount raised from the IPO would be used for meeting Basel II norms as well as to fund expansion plans. "We will try to identify merchant bankers next week for the IPO, which should come by January-end or early February," he added.
The government has permitted Indian Bank and Central Bank to go for IPOs and restructure capital. It is expected to clear the IPO proposal of United Bank soon. The government currently holds 100-per cent stake in these three banks.
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