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Indian Bank's IPO to open on Feb. 5

Corporate Reporter

Price band fixed between Rs. 77 and Rs. 91

— Photo: Bijoy Ghosh

BEEFING UP CAPITAL: M. S. Sundara Rajan (left), Executive Director, Indian Bank, and R. S. Krishnan, Vice President, ICICI Securities Limited, at a press conference in Chennai on Saturday.

CHENNAI: Indian Bank, a 100-year-old public sector bank with its headquarters in Chennai, is coming out with an initial public offer of 8.59 crore equity shares of Rs. 10 each through the 100 per cent book-building process. The price band for putting in bids for the IPO has been fixed between Rs. 77 and Rs. 91 per share. The issue is open from February 5 to 9, 2007.

Addressing presspersons here on Saturday, M. S. Sundara Rajan, Executive Director of the bank, said the offer constituted 20 per cent of the post issue paid-up capital of Rs. 429.77 crore and the Union Government will hold 80 per cent of the bank's equity capital after this issue. The shares will be listed on the Bombay Stock Exchange and the National Stock Exchange.

The bank was tapping the market to augment its capital base to meet future capital requirements arising out of the implementation of the Basel II standards and also to grow its assets, primarily loan and investment portfolio, Mr. Sundara Rajan said.

As of September this year, the bank had 1,408 branches in the country spread over 26 states and three Union Territories. Besides it has a branch in Singapore and a branch and foreign currency banking unit in Colombo, Sri Lanka.

The bank has computerised all its domestic branches and has implemented core banking solution in 800 branches and 80 extension counters as on December 31, 2006, covering 84 per cent of total business.

The bank has divided its business into four main areas — retail, agriculture, corporate and commercial financial services and SMEs (small and medium enterprises).

The bank continues to maintain its focus on addressing the needs of agricultural customers and offers direct financing to farmers, besides playing an active role in providing micro finance through self-help groups (SHG). It has loaned a total of Rs. 1,083.27 crore to 1.74 lakh SHGs as on September 30, 2006.

Performance

On the financial front, the bank has reported a total income of Rs. 2,269.47 crore in the half-year ended September 30, 2006, against Rs. 1,831.17 crore in the year-ago period.

The net profit after tax was Rs. 334 crore against Rs. 234.60 crore.

In March 2005, the bank had a paid-up capital of Rs. 4,573.96 crore. The bank netted of its accumulated unabsorbed losses of Rs. 3,830.14 crore against the paid-up capital with effect from March 31, 2006, and the balance of Rs. 743.82 crore was retained as share capital.

Subsequently the bank restructured this capital base into perpetual non-cumulative preference share capital of Rs. 400 crore consisting of 40 crore preference shares of Rs. 100 each and equity capital of Rs. 343.82 crore consisting of 34.38 crore equity shares of Rs. 10 each.

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