Financial Daily from THE HINDU group of publications
Thursday, Jul 25, 2002
Money & Banking
Markets - IPOs
Allahabad Bank mulls Rs 100-cr IPO this year To invest Rs 20 cr in ARC
Mr K. K. Rai
CHENNAI, July 24
ALLAHABAD Bank is "seriously thinking of" coming out with an IPO this year, the bank's Executive Director, Mr K.K. Rai, told Business Line.
The bank had wanted to go public last year, but the proposed issue was postponed due to the prevailing market condition.
Mr Rai said that the bank had the RBI's and the Government's approval for a Rs 100-crore initial public offering. The IPO would also be for that amount, he said. However, other details such as the premium or the merchant bankers, are yet to be decided.
Mr Rai was here in connection with the opening of a `mid-business boutique', meant exclusively for lending to medium-sized businesses.
Six such boutiques were opened all over the country today the first batch of the 30 planned for this year.
Mr Rai said that the bank's board had approved an investment of Rs 20 crore in the Asset Reconstruction Company that would be set up by banks and financial institutions.
He said that the Securitisation Bill would be a big help in reducing NPAs.
"We've already drawn up a shortlist of defaulting borrowers (against whom the bank would proceed)," he said.
Last year, Allahabad Bank's recoveries amounted to Rs 350 crore (against its target of Rs 400 crore), but fresh build-up of NPAs (as for many other banks) exceeded recoveries.
For the current year, the bank has again set itself a target for NPA reduction, of Rs 500 crore.
Asked for a comment on the bank's performance in the first quarter of the current year, Mr Rai said that the credit offtake during the period was lacklustre. But the second quarter is showing some signs of a pick up in credit, he said.
The bank has fixed itself a target of Rs 40,000 crore (deposits plus advances) for the current year. It expects to raise outstanding advances to Rs 13,500 crore from Rs 11,800 crore last year.
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