Companies

Canara Bank’s ₹3,000-crore qualified institutional placement likely next month

V Rishi Kumar Hyderabad | Updated on March 12, 2018 Published on July 15, 2014

RK Dubey CMD, Canara Bank   -  THE HINDU

16blCanaraBkCo.eps

Plans for follow-on public offer next year

Canara Bank has firmed up plans for a ₹3,000-crore QIP (qualified institutional placement) offer which is likely to hit the market sometime next month after a formal nod during its Annual General Meeting slated for July 21.

The Bangalore-headquartered State-owned bank is also considering a follow-on public offer (FPO) sometime next year.

Govt owns 69%

RK Dubey, Chairman and Managing Director of Canara Bank, said the QIP offer has secured RBI nod and will likely take place next month after it is formally approved at the AGM. Speaking on the sidelines of FICCI Finsec 2014, a financial sector conclave, the Bank CMD said they were also considering an FPO, which is likely to hit the market next year. The Government currently owns 69 per cent stake in the bank and there is considerable flexibility in downloading the stake.

He said the bank’s gross non-performing assets are pegged at 2.49 per cent and net NPAs at 1.98 per cent.

“We expect both the gross and net NPA levels to come down by March next with better recoveries,” he said.

Clouds of uncertainty

Generally, the recoveries are good across the country barring a couple of States, including Andhra Pradesh and Telangana, post the announcement of reschedule/ waiver by the Governments.

However, the announcement by these States has created confusion among farming community, he said.

“Farmers have either stopped paying or delaying payments, having a direct bearing on fresh lending. However, fresh lending has not stopped,” he said.

“Ï hope this cloud of uncertainty is cleared so that things revert to normalcy. We have 350 branches, have big presence in these two States and are in the process of adding more circles,” he said.

On loans to the infrastructure sector, he said for most of the companies lending is highly leveraged and infrastructure is faced with stress. Most of them have rescheduled their loans through the corporate debt restructuring route. With the Government laying thrust on improving the infrastructure sector, he said, “We expect things will get better.”

Published on July 15, 2014
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