The Hindu Business Line : Allahabad Bank touches highest volume on NSE

THE Allahabad Bank stock on Tuesday achieved the highest-ever volume figures on the NSE and a 52-week high on better results, improvement in its fundamentals and a proposed public issue of Rs 100 crore.

On the NSE, the counter's traded quantity touched a record 90.79 lakh shares. It recorded 64 and 242 large-size deals on the BSE and NSE, respectively. However, deals involving shares between 50,000 and one lakh were around 10. According to dealers, both trading and investment interest were at play. Around 28.08 per cent of the traded shares was placed for delivery. The stock closed at Rs 43.85 (Rs 37.85) and traded at just 3.3 times its 2003-04 earnings per share of Rs 13.37. The EPS after the results showed a jump of Rs 7.48 during the last fiscal.

According to Mr Ketan Thacker of Anagram Stockbroking, the market was calculating a minimum premium of Rs 20 to 25 for the proposed public issue at the current price level.

The valuation triggers have been put in place after the latest results (Jan-March quarter of 2004), which showed a rise in the net by 297 per cent over the same period last fiscal.

The bank's net NPA came down to 2.37 per cent from 7.08 per cent.

The capital adequacy ratio of the bank also improved to 12.52 per cent from 11.52 per cent last fiscal.

A banking stock analyst with a private bank's securities division said that now, the market was willing to put additional premium on the scrip.

The bank's reported plan to expand through acquisitions in the Southern region had enthused institutional investors.

The average market price in the six months prior to an issue, book value, level of NPA, earnings and P/E multiples are basic criteria for fixing an issue price of a bank stock, a merchant banker pointed out.

The bank made provision of a final dividend of 10 per cent and had earlier declared an interim of 10 per cent.

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