The Hindu Business Line : BoB, PNB to tap equity market

Bank of Baroda, the second largest government-owned bank in the country, said in a notification to the Bombay Stock Exchange here on Monday, that its board of directors has considered a proposal to increase the paid-up capital of the bank through public issue subject to compliance of all regulatory and statutory requirements.

Currently, the Government holds 66.80 per cent equity in the bank and post-issue, its holding is expected to come down to 51 per cent, according to sources.

The bank has room to raise up to Rs 91 crore if necessary, sources said.

Meanwhile, the bank is also in the process of finalising a $100-million syndicated loan for three years with a green shoe option of $50 million to be raised at its London office for funding overseas operations.

The mandated lead arrangers of the syndication are Bank of America, BNP Paribas, HSBC and Mizuho. The draw down of the facility is likely to take place in the middle of October 2004.

The bank is raising funds to extend credit to triple A- rated corporates, many of whom are Indian companies who want to raise ECBs, sources said.

Bank of Baroda shares closed at Rs 179 on the Bombay Stock Exchange today as against its previous closing of Rs 179.95.

Punjab National Bank, the third largest State-owned bank, is planning a `follow-on public offer' pending approvals from the Union Government and RBI, for a further issuance of up to 5 crore shares with pricing to be discovered through the book-building process.

The bank's board has approved the fresh equity issue and will seek shareholders' approval for the same in its extraordinary general meeting on October 11, PNB said in a notification to the BSE on Monday.

Currently, the Government holds 80 per cent stake in PNB.

The bank's shares closed at Rs 271.40 at the BSE on Monday as against its previous closing at Rs 276.25.

PNB's initial public offer in 2002 was oversubscribed by over 300 per cent, with the total subscription touching about Rs 690 crore against the issue size of Rs 164.49 crore.

The bank had come up with an issue of 5.30-crore shares of Rs 10 each for cash at a premium of Rs 21 per share aggregating Rs 164.49 crore.

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