Indian Bank FPO likely in June-July

The government-owned Indian Bank today said its follow-on-public offer (FPO) of about Rs 1,500 crore was expected to hit the market in June or July.

Indian Bank Chairman and Managing Director T M Bhasin told reporters said the Draft Red Herring Prospectus for the issue will be filed by mid-may this year.

The bank plans to raise around Rs 1,500 crore through the FPO route to fund its business growth.

On MSME (Micro, Small and Medium Enterprises) loans, he said that it had grown around 49 per cent CAGR (Compound Annual Growth rate) over the years and expected a similar trend this year too.

On the microfinance front, the bank planned to increase the share of credit disbursements from the present 32 per cent to 50 per cent by March 2012, he said.

To a question, Bhasin said that norms for lending to builders have been tightened now and this includes two legal attorneys verifying a land title as against the previous policy of one attorney for the purpose.

Meanwhile, the Indian Bank has entered into an agreement with automobile manufacturer Bajaj Auto to finance three wheelers, offering the prospective borrower about 85 per cent of the vehicle's on road price.

N Eshwaran, general manager, MSME, Indian Bank and R C Maheshwari, president, commercial vehicle business, Bajaj Auto, signed an MoU in the presence of Indian Bank CMD T M Bhasin.

Bhasin said the bank would finance about 85 per cent of the price of the three-wheeler, which would cost Rs 1.47 lakh.

He said the target was to finance 1,000 vehicles a month in the coming months and then 'augment that based on our experience.'

Today's initiative was keeping in with the bank's policy to increase lending in the auto sector, he said adding the bank will open savings bank account for the borrowers under this scheme and ''persuade them to save daily.'

Maheshwari said the loan period was for 60 months at a 'reasonable' rate of interest at 11.5 per cent.