The Hindu Business Line : UTI Bank raises $239 m via GDRs

The money thus raised will be used for the bank's growth in the next two to three years and also to augment the Capital Adequacy Ratio, Dr P.J. Nayak, Chairman and Managing Director of UTI Bank, said. With the GDR the bank's Tier-I capital is 9.5 per cent.

The $239.30 million is not inclusive of the greenshoe option. Dr Nayak said that the bank would take a decision on whether to exercise the greenshoe option later.

Dr Nayak said, "We are growing so fast that we need capital. Our CAR had fallen to 9.5 per cent. Now with the GDR it has increased to 13 per cent. If we had not raised the money it would have constrained our capital reserves."

The bank's capital position is comfortable for the next two to three years and it can proceed with its expansion plans, Dr Nayak said.

Dr Nayak said, "As per the Basel II norms, the market risk will be effective from March 2006 and the other risks will be effective from March 2007. So, we are ahead by one year."

The GDRs will be listed on the London Stock Exchange. The issue was priced at $5.91 per GDR, which was at parity to the last closing price of Rs 256.65 per share on the NSE on Tuesday.

The GDRs were placed through a book-building exercise.

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