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Tuesday, Jun 23, 2009
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Business Daily from THE HINDU group of publications Tuesday, Jun 23, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Public Sector Banks Money & Banking - IPOs Industry & Economy - Disinvestment United Bank plans IPO in Dec to mobilise Rs 300-400 cr Our Bureau Kolkata, June 22 United Bank of India plans to hit the capital market by December-end with an Initial Public Offering to mobilise Rs 300-400 crore, according to its Chairman and Managing Director, Mr S.C. Gupta. “We will go for an IPO once our capital restructuring exercise is complete by the end of September,” Mr Gupta told newspersons on the sidelines of the banking conclave, organised by the Federation of Indian Chambers of Commerce and Industry here on Monday. The Government holding in the bank, currently at 100 per cent, might come down to 80 per cent post-IPO, a senior official at the bank said. The Government recently approved the capital restructuring of the bank, which would include reduction in paid-up equity by over 80 per cent to improve its financial parameters. The paid-up capital of the bank would come down to Rs 266 crore (Rs 1,532 crore). The excess capital of Rs 1,266 crore would be infused into the capital reserves of the bank. The restructuring would enhance the book value of the bank’s shares at about Rs 90 (up from Rs 14 at present). Further details of the issue would be worked out subsequently, Mr Gupta said. United Bank, the CMD said, might cut its prime lending rate by 25-50 basis points. “Our Asset-Liability Committee will meet early next week to take a call on interest rates. We might cut interest rates on both advances and deposits by about 25-50 basis points,” he said. Business plansUnited Bank hoped to achieve 25 per cent growth in advances and 21 per cent in deposits in 2009-10 and to add 108 branches this year in order to increase its network, he said. The bank, it was indicated, might set up a representative office in Bangladesh by the end of December this year and would like to have a presence in Myanmar at a later date. “The bulk of the trade between India and Myanmar is routed through our bank, so it makes sense to have our presence there,” he added. Long-term mobilisingEarlier, addressing the conclave, Mr Gupta said the banks should be allowed to mobilise long-term funds for funding infrastructure projects. “Banks are currently not allowed to accept deposits beyond 10 years. Infrastructure financing is generally for 15-20 years. Banks need to have long-term funds, in order to address the mismatch,” he said. Consolidation was essential to face competition and escalate the efficiency of banks, he said and added, “Serious public view needs to be mobilised about consolidation.” United Bank likely to go for IPO in 6 months United Bank net profit dips 42% More Stories on : Public Sector Banks | IPOs | Disinvestment
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