UTI Bank to place 26% stake with FIIs

Mumbai: The UTI Bank board has cleared a proposal to place 26 per cent of its equity with two Mauritius-based funds South Asia Regional Fund and CDC Financial Services (Mauritius) managed by CDC Capital partners. The bank will offer 46.8 million shares to both the funds at Rs 34 each, which is at a premium of Rs 10 over 21 Septembers closing price of Rs 24.

The price is also at a premium to the Sebi formula price, which is higher of the average of weekly high, and lower among the closing prices during the last six months and last two weeks.

With this, the bank will mobilise Rs 157.6 crore and its paid-up capital will rise by 35.1 per cent to Rs 178.3 crore from Rs 131.19 crore. Its capital adequacy ratio will rise to 10-11 per cent.

The bank is approaching the RBI and Sebi for the necessary clearances. It will also move the Foreign Investment Promotion Board for approvals, if required. The government allows FII investment up to 24 per cent. Beyond this, approvals from government authorities and a special resolution are required to be passed by the shareholders for hiking FII shareholding.