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| Punjab & Sind Bank to raise Rs 500-600 crore via IPO |
| Vijay C Roy / New Delhi/ Chandigarh Aug 23, 2010, 00:09 IST |
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The proceeds from the issue will be used for expansion plans
Government-owned Punjab & Sind Bank is planning to raise Rs 500-600 crore through an initial public offer (IPO) by diluting 17-18 per cent of the government stake. The bank is likely to hit the capital market by this year. The proceeds from the issue would be utilised in funding the expansion plans.
The government owns 100 per cent stake in the bank. Speaking to Business Standard, Executive Director of the Bank, P K Anand, said, “We would be filing DRHP(Draft Red Hearing Prospectus) document to Sebi by this month. We would be diluting 17-18 per cent of the government stake or in other words, the bank would offer 40 million shares to the public. If everything goes well, we would be able to hit the capital market by this financial year.”
In FY10, the bank did a business of Rs 82,000 crore and is likely to touch Rs 95,000 crore this year. The deposit was Rs 49,500 crore last year while advances stood at Rs 32, 500 crore. In FY10, the bank posted an 18 per cent jump in net profit at Rs 508.8 crore compared to Rs 431.1 crore in the previous year.
When asked about the projected growth, he added, “This year we are consolidating and expecting the same growth of 20-23 per cent as projected by the Reserve Bank of India.” The bank has a capital adequacy ratio (CAR) of 12.73 per cent, while the CD ratio stood at 67 per cent.
At present, the bank has 920 branches across India, with 450 in Punjab alone. Meanwhile, he mentioned the bank is planning to open 100 branches and 180 ATM’s across India by the end of this financial year. Out of the total branches and ATMs, 40 branches and 35 ATMs would be in Punjab.
Punjab constitutes 23-25 per cent of the bank’s total business. Besides Punjab, the bank is planning to open branches in Haryana, Uttar Pradesh, Gujarat, Tamil Nadu, among others.
The bank is also in process of hiring 2,000 clerks and officers this financial year to cater to the expansion plans. He also mentioned that the bank has hired the services of Wipro for making their branches CBS enabled. Initially Satyam was given the contract but after Satyam fiasco, the contract was terminated and handed over to Wipro.
He added, “Our pilot project is already operational with 15 branches under CBS compliance and by 2012 all the branches would be CBS enabled.”
The bank also announced attractive rate of interest of 10.5 per cent for financing rural godowns of any storage capacity according to the requirement of borrower in Punjab and Haryana.
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