The Hindu Business Line : Allahabad Bank chief upbeat on second public offering

THE Chairman and Managing Director of Allahabad Bank, Mr O.N. Singh, is upbeat on the forthcoming issue of the bank's equity shares expected to hit the market in mid-April.

"The market is buoyant and the size of the issue is small, the face value being only Rs 100 crore," Mr Singh told Business Line.

This is the second time in less than two-and-a-half years (the first IPO was in November 2002) the bank is entering the market with an offer of equity shares.

The issue will be offered through the book-building process, which means the price will be finalised only a few days before the opening of the issue. "It is almost certain that the issue will attract a premium whose amount will be determined in due course," he added.

Mr Singh had no doubts that both FIs and FIIs would subscribe to the issue in a big way. "The present composition of the shareholding pattern suggests that there is a good deal of scope for the institutions to pick up stakes in the bank," he said, pointing out that right now the FIs' holding was less than two per cent. Qualified institutional bodies such as FIs and FIIs would be offered 40 per cent of the proposed issue of a total of 10 crore equity shares, while high net worth individuals (each applying for one lakh shares or more) and ordinary public 20 per cent each and the balance 20 per cent to be divided in equal proportions between bank employees and the existing shareholders.

"Everything will be in demat form," he said. It might be noted that nearly 50 per cent of Allahabad Bank's existing shares is still in non-demat form. At present, the price-earning ratio of the bank's share was less than five, which, he felt, was "very good."

"There is tremendous scope for growth and our bank is in a growth mode," he said.

"The performance in the first three quarters has been better than the industry average and hopefully the trend will be maintained in the current quarter," he added.

"We will become a large and strong bank; post-issue the equity capital will rise to Rs 446 crore, the capital adequacy will be more than 15 per cent and our reserves will be healthy to give us enough strength to expand, both organically and inorganically," Mr Singh observed.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Rupee declines; securities weak

Buffett bets big against dollar

IRDA chief urges industry to build credible database

Sundaram Home expects disbursements to rise 15%

Fringe benefit tax may hit group superannuation schemes

Aviva unveils two unit-linked fund options

ICICI Lombard offers weather cover to GHCL

Allahabad Bank chief upbeat on second public offering