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Bharat Overseas Bank to raise Rs 100 cr through IPO in October

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Mr Ravi Mehrotra (left), President, Franklin Templeton India, and Mr G. Krishna Murthy, Chairman & CEO, Bharat Overseas Bank, at a press conference in Mumbai on Tuesday. - - Paul Noronha

Mumbai , July 19

CHENNAI-BASED Bharat Overseas Bank Ltd is tapping the capital markets with its Rs 100-crore initial public offer in October.

Mr G. Krishna Murthy, Chairman and Chief Executive Officer of the bank, said that the proceeds from the IPO would go towards expanding the business of the bank as well as to meet capital requirements of the Basel II requirements. By 2006 the bank hopes to increase its net worth to Rs 300 crore, to meet RBI guidelines.

The bank is targeting to grow to Rs 12,000 crore in business by 2010. Its branch network, currently at 95, would also be expanded to 200, Mr Murthy said.

He also said that the bank wanted to bring down the corporate loan book, which is currently at 55 per cent of total assets, to around 40 per cent by 2010.

Accordingly, the SME and retail portfolio, which is now at 45 per cent, would increase to 60 per cent. The bank also hopes to increase the non-fund income from the current level of 6 per cent to 14 per cent, through tie-ups to distribute retail products such as insurance and mutual funds.

He was speaking at a press conference announcing a distribution tie-up between the bank and Franklin Templeton.

Tie-up with Franklin Templeton: BOBL would be distributing the mutual fund products of Franklin Templeton to its customers across its various branches.

The partnership is expected to net Franklin Templeton assets under management of Rs 100 crore in the next six months, Mr Murthy said.

Speaking at the occasion, Mr Ravi Mehrotra, President, Franklin Templeton India, said that the tie-up with BOBL would help Franklin Templeton expand its market as well as ensure higher penetration in its existing markets.

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