Financial Daily from THE HINDU group of publications
Friday, Oct 14, 2005
Financial Daily from THE HINDU group of publications Friday, Oct 14, 2005 |
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Money & Banking
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IPOs Markets - Financial Services Files prospectus for public issue — BoB plans foray into insurance, stock broking Our Bureau
Coimbatore , Oct 13 BANK of Baroda (BoB) has filed a Red Herring Prospectus with the Securities and Exchange Board ofIndia (SEBI) in connection with its proposed public issue that envisages issuance of 71,000,000 equity shares of Rs 10 each, entirely through the book-building route. The issue size includes 7,100,000 equity shares reserved for eligible employees. In its draft prospectus, the bank has indicated thatit plans to enter into life insurance business and stock broking. The bank, which has presence in 19 countries, has also expressed a desire to ramp up its international operations. The bank has stated that the objects of the issue are to augment its capital base to meet the future capital requirements in the wake of the implementation of the Basel II standards and the growth in its assets, mainly loan and investment portfolio, in view of the growth in the Indian economy and for other general corporate purposes. BoB said that it has been maintaining an international presence for the past 52 years and it recently opened a branch in Leicester in the UK and a representative office in Bangkok in Thailand. It has got the RBI nod and is awaiting the host country approval for opening branches in Houston (US), Hong Kong and an Offshore Banking Unit in Singapore. RBI has also given the green signal to BoB for opening new offices in Bangladesh, Canada, Maldives, New Zealand, Sri Lanka and Trinidad and Tobago, and BoB "will continue to look for attractive opportunities to expand our international reach and grow our business outside India," the draft RHP said. The bank has also indicated that there would be increased thrust on agriculture and SSI sector by opening more SSI branches. The BoB draft porspectus said, "we intend to enter into the life insurance business". It said that selling its own products might require the bank, its subsidiaries or joint ventures to take balance sheet risk in these areas. The prospectus mentioned that the bank intends to expand into new lines of business "which are complementary to our existing product and service lines such as life insurance and stock broking". The bank said it planned to develop these businesses by entering into joint ventures and alliances with leading product and service suppliers and in some cases might also make `strategic acquisitions'.
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