The Hindu Business Line : Federal Bank GDR lists at a premium

THE Federal Bank GDR, which was listed on the London Stock Exchange on Thursday, was trading at a premium. The GDR, each representing an underlying equity share priced at $3.97, were trading at a premium of 5 per cent into the second day today, at $4.15.

The GDR traded within a narrow range between $4 and $4.25. In the Indian markets, the Federal Bank stock closed lower at Rs 174 from Rs 176.55 yesterday. The weakness in the Indian market was not reflected at the London bourse, where the GDR continued to trade around $4.15 levels - or slightly over Rs 183.

With the inflow from the GDR, the capital adequacy of the bank has increased to 13 per cent. "In the backdrop of the improved capital adequacy, the bank is better prepared to implement Basel II norms," Mr M. Venugopalan, Chairman of the bank said. While several other banks have been entering the market to shore up their capital base and cover their increased credit risk as their credit volumes grow as well as to prepare for the Basel II norms, Federal Bank will not have to enhance its capital base for another two years, Mr Venugopalan said.

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