Financial Daily from THE HINDU group of publications
Wednesday, Aug 21, 2002
Money & Banking
Tayals to hike stake in Bank of Rajasthan
MUMBAI, Aug. 20
THE promoters of Bank of Rajasthan have announced plans to increase their equity holding in the bank by another 10 per cent from the current level of 39 per cent through the creeping acquisition route.
"We are examining this option to raise our stake but we are not ready with funds,'' Mr. Praveen Kumar Tayal, Chairman, Bank of Rajasthan, said.
The promoters, the Tayal Group, are arranging funds from personal sources. "We need to raise Rs 15 crore before September 2002 to raise the stake by 10 per cent,'' he added.
Currently, Bank of Rajasthan's share prices stands at Rs 14 on the bourses. The Securities and Exchange Board of India's takeover regulations permits a promoter to acquire up to 10 per cent stake in a company in a particular year through the creeping acquisition route.
"Until September 2002 we will be able to acquire 10 per cent stake. Thereafter, we can acquire five per cent every financial year,'' Mr. Tayal said. Therefore, efforts are on to raise the required funds before that, he said.
RBI has given Mr Tayal an extension of two years - from August 2002 to August 2004.
Mr Tayal took over as Chairman of the bank in December 1998 with accumulated losses of over Rs 150 crore, for the financial year ended March 31, 2002 the bank made a net profit of Rs 40 crore.
A target of Rs 60 crore has been set for net profit for this financial year, said the chairman.
"We are going to increase the number of branches to 500 over a period of three years. We want to increase it at the rate of 4-5 branches in a month and 50 branches in a year,'' said Mr Tayal.
The bank has a strong presence in the north, especially in Rajasthan with 175 branches in the State. So, it plans to expand in the south and west.
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