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Andhra Bank's follow-on public issue

Special Correspondent

Issue will open on January 16

HYDERABAD: Amidst protests from its employees' union, Andhra Bank has announced its entry into the capital market with a follow-on public issue of 8.5 crore equity shares of Rs. 10 each for cash. The premium will be decided through a book building process and the price band will be fixed a day before its opening date. The issue will open on January 16 and close on January 20.

As part of the offer, the bank has decided to reserve 85 lakh equity shares for employees and the balance 7.65 crore shares will be offered to the public. Of these, 50 per cent will be allocated to qualified institutional buyers on a proportionate basis, 15 per cent for non-institutional investors and the balance 35 per cent will be allotted to retail investors. The issue will constitute 17.53 per cent of the post-issue fully diluted paid-up equity capital of the bank and it will bring down the Government's shareholding from 62.5 per cent to 51.55 per cent.

Announcing this at a press conference here on Saturday, the bank Chairman and Managing Director, K. Ramakrishnan, said the issue was aimed at augmenting the capital base to meet the increasing demand for credit.

He sought to allay apprehensions among the employees over reducing the Government's equity, claiming that the bank had to increase its capital base to meet the requirements of the ever-expanding customer base.

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