Business Daily from THE HINDU group of publications
Thursday, Apr 17, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Thursday, Apr 17, 2008 ePaper | Mobile/PDA Version | Audio |
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Money & Banking
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Public Sector Banks United Bank plans capital rejig The banks has plans for an IPO of small size. Santanu Sanyal Kolkata, April 16 United Bank of India is mulling restructuring of capital as a first step towards initial public offering (IPO) likely next year. “We propose to reduce our equity size from the present Rs 1,532 crore to around Rs 200-300 crore,” according to a spokesman for the bank. “The details will be worked out after the finalisation of the balance-sheet by the end of this month.” The bank, as it was pointed out, would proceed step by step in matter of capital restructuring. The first priority would be to opt for the private placement route, mostly with the government institutions though there were inquires from foreign private players for probable participation in it. Selective placement“We’ll be selective about it,” the spokesman said suggesting that the premium on the private placement should help bank pay back to the government, it is felt. “The exercise will be over by the end of the current quarter,” he observed. The size of the IPO, it was indicated, would be small as the banks with large capital base following large public issues were now facing problems. In small doses“We do not want repetition of the same in our bank, therefore, we’ll go for small doses of disinvestments and in stages,” he said, adding, “the bank’s expansion of the equity size should go hand in hand with the growth which should help command a premium on the issue”. The spokesman, however, declined to comment on the probable size of the public issue, saying it was too early to decide. “It could be five per cent, or 10 per cent but nothing has yet been decided.” As for the timing of the issue it could be the last quarter of the current fiscal. The completion of the pre-issue exercise would take time. “Besides, much will depend on how the market behaves,” he added. More Stories on : Public Sector Banks | IPOs
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