Indian
Bank looks to raise Rs900-cr via IPO
New Delhi: Indian Bank is looking to raise Rs800
to Rs900 crore from its maiden public issue which is likely
to hit the market in January 2007. The bank has filed
the draft red herring prospectus with market regulator
Sebi for the proposed public offer of 85,950,000 shares
of Rs10 each for cash at a premium to be decided through
book-building process.
Bank
officials said Indian Bank expects an increase of 17-18
per cent in business, 25-30 per cent in credit and 17-18
per cent in deposits in 2007.
Total
business stood at Rs70,000 crore as of September 2006
and the net profit grew by 38 per cent to Rs334 crore
in the first half of 2006-07.
Besides
IPO proceeds, Indian Bank is also open to mobilise funds
through other means like Tier-II bonds to support balance
sheet expansion.
The
capital adequacy ratio of the bank stood at 12.02 per
cent and the additional capital mobilisation through the
IPO was likely to give additional cushion to meet the
Basel-II norms that requires banks to provide capital
for operational risks, besides credit and market risks.
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Banks
ask RBI for more clarity on takeout financing
Bangalore: Financial institutions have asked the
Reserve Bank of India to provide detailed accounting guidelines
on `takeout financing' (where one institution takes over
the loan asset of another after an interval of time from
date of the disbursement of the loan) for infrastructure.
Among the accounting issues involved are treatment of
the assets in the loan books of both the financiers for
purposes of , `risk weighting'- a process that determines
of what proportion of a bank's own capital as opposed
to depositors' monies that should finance its loan assets-
and provisioning for a possible loss from non-recovery
of the assets. Bankers said the issue is whether the `risk
weighting' and standard loan loss provisioning be made
at the time of the agreement or when the asset is taken
over.
Takeout
financing is a contractual agreement, where the secondary
financier agrees to buyout the assets at the end of a
fixed term, at a predetermined price.
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