Indian Bank to appoint merchant bankers on FPO

Public sector lender Indian Bank is looking to hire merchant bankers to advise it on a proposed Rs 61 crore follow-on public offer (FPO).

"Indian Bank is planning to come out with an FPO shortly and invites sealed tenders from reputed lead managers for appointment as book running lead managers to the issue," the bank said in a public announcement today.

Last week, Indian Bank said it had received the government's approval to raise additional equity capital of Rs 61.4 crore through the FPO. The bank will come out with the FPO in July or August, 2011.

The bank will sell 6.14 crore shares with a face value of Rs 10 each through the FPO.

The present equity capital of Indian Bank is Rs 429.77 crore, of which 80% is held by the government. After the share sale, the government's stake will go down to 70%.

The Chennai-headquartered bank plans to use the fund to boost its Tier-I capital, which stood at 11.02% at the end of March, 2011.

The bank is in the process of filing a draft prospectus for the FPO with market regulator the Securities and Exchange Board of India (Sebi).