Punjab & Sind Bank to mop up around Rs 500cr from IPO

Punjab & Sind Bank to mop up around Rs 500cr from IPO

"We are expecting the government approval (for IPO)...the IPO could hit the market in either in the last week of June or early July," Punjab & Sind Bank chairman and managing director GS Vedi told reporters here today.

"We have proposed to issue four crore shares. The size of the issue is expected to be between Rs 400 and 500 crore," he said. Currently the government owns 100 per cent stake in the bank, he said after announcing 2009-10 results.

There are 19 nationalised banks in the country. Of this, 18 have gone public with the latest being the Kolkata-based United Bank of India that got listed earlier this year.
The money raised through IPO would help the bank to grow the business and asset book, he said, adding the bank is also expecting capital infusion of Rs 500-700 crore from the government during this fiscal.

The capital infusion would result in shoring up of its tier I capital above 8 per cent, he said, adding the tier I capital stands at 7.68 per cent as of March end.
The government had restructured the equity structure of the bank in 2008. After the capital rejig, the equity capital of the bank came down to Rs 183.06 crore from Rs 743.06 crore earlier.

Talking about the annual result, Vedi said, the bank clocked 18 per cent growth in net profit at Rs 508.8 crore in FY10 compared to Rs 431.1 crore the previous year. Its income rose by 19 per cent at Rs 4,345.9 crore while the net interest income grew by 17 per cent at Rs 1,183.9 crore.

The net interest margin, however, declined from 2.91 per cent to 2.44 per cent during the year. The capital adequacy ratio (CAR or capital against various risks) also declined to 13.1 per cent against 14.35 per cent in FY09.

Total business increased by 37.9 per cent at Rs 81,894 crore at the end of 2009-10, he said, adding, the bank expects to cross the business mix of Rs 1 lakh crore in this fiscal.
"This year we are targeting a net profit of Rs 750 crore and total business growth of 25-30 per cent," he said.The bank is poised to increase the number of its branches from 918 to 1,000 by the end of Mach this fiscal, he added