The Hindu Business Line : Dena Bank gets nod for 2nd public offer

THE Union Government has given its approval to Dena Bank for its second public issue. The issue is for an aggregate value of Rs 80 crore, comprising eight crore equity shares of Rs 10 each, the bank has informed the BSE.

The meeting of the bank's board of directors will be held on October 30 to take on record the Government's approval.

Further approvals required will be obtained from the board during the meeting so that the bank can enter the market at the earliest, said the notice in the exchange.

Our Ahmedabad Bureau reports: "We got the Finance Ministry's approval only on Tuesday. We will offer eight crore shares to the public at a premium that will be worked out in consultation with our merchant bankers. We will now start the process for the public issue and it should hit the market in the last quarter of the current financial year," a senior Dena Bank official told Business Line on Wednesday.

The bank has already set in motion the process of appointing merchant bankers to work out the details of the public float. The public issue will see the Government's holding in the bank fall from 71 per cent at present to 51 per cent, the official said.

The Dena Bank scrip has been hovering at about Rs 25 per share in the last six months.

Dena Bank had attracted a premium of Rs 20 for a Rs 10 share when it first went to the market in 1996. But this time, it is clear that it would have to price its shares below the issue price at the time of the Initial Public Offering (IPO), the official said.

The bank has improved its performance indicators and brought them in line with the Reserve Bank of India (RBI) guidelines, the official said, adding that the net non-performing asset (NPA) levels are likely to fall below 8 per cent when the bank announces its second quarter results.

"We have improved our performance on all parameters - capital adequacy ratio, return on assets, NPAs. In the last couple of quarters, we have brought down our NPA levels to single digits, which is the norm prescribed by the RBI. The last published figure stands at 8.70 per cent, but we are confident that it would go down further," he said.

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