• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• Business Line
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

Eyes price of about two times the adjusted book value

Kolkata , Aug. 24

State Bank of Hyderabad (SBH), an unlisted bank with an unwieldy book value of Rs 12,255 and an authorised capital of merely Rs 50 crore, is looking at a bonus issue as a precursor to dilution of stake by SBI and its eventual listing.

SBH, which is hoping to get a price of about two times the adjusted book value, is rooting for changes in the legislation governing SBI and its subsidiaries. The legislation has been hanging fire for quite sometime now.

The bank, said Mr Amitabha Guha, Managing Director, hopes to tap the market later this year, provided all the pending issues are sorted out. The general idea is to eventually bring SBH in line with the other listed public-sector banks.

In most cases, their stocks carry a face value Rs 10. In contrast, shares of the listed SBI associates (like State Bank of Travancore and State Bank of Mysore) currently have a face value of Rs 100.

"We may have to issue bonus shares to SBI. The pricing of the offer and other such factors will depend on the condition of the market. No due diligence has yet been done with regard to the stake dilution," he told newspersons here on Thursday, adding that the valuation will have to be finally "acceptable" to the investing public.

The bank, which is now the largest of SBI's associates, has no other specific capital-raising proposal at the moment.

However, it has headroom for Rs 500 crore of subordinated debt, which may not be utilised immediately. Its capital adequacy ratio stood at about 12 per cent in 2005-06.

More Stories on : Bonus Announcements | Public Sector Banks | Non-Performing Assets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Rupee flat against dollar

Copyright © 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line