Indian Bank to raise Rs 1,000 cr by December

Indian Bank plans to raise around Rs 1,000 crore in December 2010. The proposed fund raising would help the bank to increase its credit portfolio by Rs 8,000 crore, said a senior bank official. Recently, the bank has raised Rs 1,000 crore, the proposed fund raising would be the second round of fund raising.

Besides, the bank also said it was planning to call for EOI (express of interest) from companies, which are interested to join hands to revamp its mutual fund subsidiary.

Speaking to Business Standard T M Bhasin, chairman and managing director, said that the bank planned to increase its credit portfolio by Rs 16,000 crore during 2010-11. Bank’s loan book as on March 31 was at Rs 62,500 crore.

During the current year, the the bank has raised Rs 1,000 crore and plans to raise another Rs 1,000 crore in December.

“Every Rs 1,000 crore fund raising means increase in our loan book by Rs 8,000 crore”, said Bhasin. He added, the bank would raise the money through Tier-II bonds, he added.

It may be noted, the bank’s board on May 31 gave approval to raise Rs 1,000 crore as Tier-II capital, in one or more tranches. The money was raised through two transactions and the last one was Rs 500 crore through issue of bonds on a private placement basis in June. The proposed fund raising would be a fresh one, he said. The Chennai-based bank has set a target to increase its loan book by 25 per cent during 2010-11. One of the major sectors, which the bank was betting big on was infrastructure, which had grown around 40 per cent, said Bhasin.

Executive Director Anup Sankar Bhattacharya added: “Our target is to become a zero net non-performing asset (NPA) by March 31, 2012, since it had shifted to identifying NPAs entirely automatically from its core banking software.

He added, gross NPA as on June 30 was 1.45 per cent, which would come down to 0.50 per cent by March, 2012. Net NPA would come down to zero from the current 0.71 per cent.