| The Specified Undertaking of Unit Trust of India (SUUTI) and the Life Insurance Corporation (LIC), the principal promoter shareholders of UTI Bank, want the bank management to give retail investors a chance to make further investments in the bank’s growth through subscription to fresh equity shares.
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| UTI Bank was planning to raise $600 million through a global depository receipts (GDR) issue and a simultaneous preferential offer to its promoters, which also include the General Insurance Corporation (GIC).
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| The bank, at its extraordinary general meeting on June 25, deferred its capital raising plans after both SUUTI, an entity carved out of the erstwhile Unit Trust of India, and LIC asked for more time to take a call on subscribing to the preferential offer. SUUTI is the largest shareholder in the bank with 27.43 per cent stake and LIC owns 10.38 per cent of the bank.
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| S B Mathur, administrator, SUUTI, and a member of the UTI board of directors, said,”There is a view among the retail investors that they want to invest in the bank. They have been with the bank through thick and thin. Hence, we cannot ignore their demand. This is a small section of investors, numbering about three lakh.”
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| “We are deliberating on how to give them a chance to invest in the bank. We could consider a follow-on public issue or a rights issue,’’ added Mathur. He, however, said that there’s no going back on the GDR issue.
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| When asked whether the promoter shareholders would forgo a part of the preferential offer in favour of the retail investors, Mathur said, “Nothing has been decided.’’
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| “SUUTI has no problem in arranging the funds. We can offload our investments in liquid funds and invest in the preferential offer. We do have liabilities of around Rs 14,000 crore to Rs 15,000 crore which are due in two tranches; the first tranche in October 2008 and the second in April 2009. We have plenty of time and will have no problem in cash management,’’ added Mathur. |
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