The Hindu Business Line : Indian Bank files for IPO

The figures The offer will constitute 20 per cent of the post-issue fully diluted paid up equity capital of the bank. The shares will be offered for cash at a premium, which will be decided through a 100 per cent book-building process.

Dr K.C. Chakrabarty, Chairman and Managing Director

Mumbai , Dec. 2

Indian Bank plans to hit the capital markets with an initial public offer of 8.6 crore equity shares. The bank intends to list on the exchanges by the end of January.

The Chennai-headquartered public sector bank filed its Draft Red Herring Prospectus (DRHP) with SEBI on December 1.

The offer will constitute 20 per cent of the post-issue fully diluted paid up equity capital of the bank, said a news release from the bank.

"The bank needs more capital. We want to increase the bank's balance sheet as we foray into new areas like insurance and stock-broking," said Dr K.C. Chakrabarty, Chairman and Managing Director, Indian Bank.

The shares will be offered for cash at a premium, which will be decided through a 100 per cent book-building process.

Equity shares

The bank has proposed to reserve 85.95 lakh equity shares for allotment to employees. The balance 7.74 crore equity shares would constitute the net offer to the public, 60 per cent of which will be allotted to qualified institutional buyers (of which 5 per cent would be to mutual funds).

Further, 10 per cent would be reserved for non-institutional bidders, the balance 30 per cent being available to retail investors on a proportionate basis.

Indian Bank has 1,408 branches in the country across 26 States and three Union Territories. It has branches in Singapore and Colombo.

The bank, as on September 30, 2006, had over 1.81 crore customers.

Indian Bank had posted a year-on-year rise of 60 per cent in net profit at Rs 169.19 crore (Rs 105.57 crore) for the quarter ended September 30. Total income increased to Rs 1,198.45 crore (Rs 941.47 crore). As on that date, the bank's net NPAs had declined to 0.45 per cent (1.06 per cent) from a year ago. The capital adequacy ratio stood at 12.02 per cent (14.08 per cent).

Focus areas

The bank's focus areas continue to be agriculture, SMEs and retail, officials from the bank said at the time of issue of the second quarter results for the current fiscal.

The book running lead managers to Indian Bank's IPO are SBI Capital Markets Ltd, Enam Financial Consultants Private Ltd, ICICI Securities Ltd and Kotak Mahindra Capital Company Ltd. The last bank to hit the capital markets with an IPO was Development Credit Bank, which raised Rs 186 crore a couple of months ago. Last year, several public sector banks had raised money through follow-on public issues.

More public sector banks are planning to list themselves, with Central Bank of India having expressed its intention to go public.

Eighteen public sector banks are currently listed on the BSE.

BSE's Bankex index went up 1.95 per cent, week-on-week, to close at 7289.88 points on Friday. On a month-on-month basis it gained 11.37 per cent.

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