Hyderabad, Feb. 1
DEVELOPMENT Credit Bank Ltd plans to tap the capital market with a private placement and an initial public offer (IPO) for raising funds to the tune of Rs 350 crore. These equity issues are aimed at strengthening the bank's capital adequacy ratio (CAR) as well as meeting the growing business needs, its Managing Director and Chief Executive Officer, Mr Gautam Vir, said.
With a paid-up equity of Rs 170 crore and a CAR of below 10 per cent, the bank proposes to go in for private placement of equity in February for raising funds of up to Rs 90 crore.
"We are also planning to file the red herring prospectus with the Securities and Exchange Board of India for an IPO sometime during March for raising up to Rs 250 crore," Mr Vir said.
Following the private placement and IPO, the equity holding of the bank's largest shareholder - The Aga Khan Fund for Economic Development - will come down to around 32 per cent on the expanded equity from 69 per cent.
Mr Vir was addressing newspersons here on Wednesday to announce the national launch of the bank's `Free Style Savings Account' with a free 90-day trial offer, claiming it as the first of its kind in the country. The bank proposes to introduce the product in other cities shortly.
Under this scheme, by paying an annual fee of Rs 555, the customer can have access to a host of free services and facilities of a savings account without the hassle of maintaining the average quarterly balance, he said.
According to the Development Credit Bank Consumer Banking Group Head, Mr P.N. Vasudevan, the savings account comes with a host of benefits and free facilities such as an international debit card, personal accident death insurance and any-branch banking facility.