Financial Daily from THE HINDU group of publications
Tuesday, Jan 31, 2006
Financial Daily from THE HINDU group of publications Tuesday, Jan 31, 2006 |
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Money & Banking
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Private Banks Markets - Stocks Federal Bank GDR to list on London Stock Exchange on Thursday C.J. Punnathara
Kochi , Jan. 30 THE Federal Bank GDR, which mobilised close to $80 million, is slated to list at the London Stock Exchange on Thursday. While the issue of 18 million Global Depository Receipts realised $71.46 million, the green shoe option of 2 million GDR was also fully subscribed, bringing in a total of $80 million to the bank. The GDR, each representing an underlying equity share, were priced at $3.97 each — working out to approximately Rs 175 per share. "While universally there is a good demand for Indian paper, the response to the bank's GDR issue was very positive," Mr M. Venugopalan, Chairman of Federal Bank, said. The demand for the bank's GDR was to the tune of $601 million, an over-subscription of 7.5 times. Some 60 institutional investors, including some top names in the international market — Fidelity, Franklin Templeton, HSBC Asset Management Company, Dubai Bank and GE Asset Management Company — subscribed to the issue. Based on the recommendations of the lead managers, the Citigroup and Merrill Lynch, the bank made graded allocations to these institutional investors. The money mobilised from the GDR issue will be received at the bank on Tuesday, and three days from the date of this process, the GDR will be listed on the European exchange. Federal Bank is the first and only old-generation private sector bank to have successfully undertaken a GDR issue. Subsequent to the issue, the share capital of the bank is slated to go up from Rs 65.6 crore to Rs 85.6 crore. The ICICI Bank holding in the bank, which is currently around 10 per cent,is expected to decline to 7.5 per cent. The GDR issue would mobilise Rs 350 crore to the bank, including the premium. The net worth is slated to go up from close to Rs 900 crore to Rs 1,250 crore. Going by the overwhelming response to the issue, the GDR should be listing at the European bourses at a premium. However, the actual valuation will be more dependant on the price quoted at the Indian bourses. Over 75 per cent of the bank's equity is listed on the Indian bourses, sources in the bank said. Federal Bank share closed lower at Rs 180.80, from the previous close to Rs 185.
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