Punjab & Sind Bank gets Sebi nod for IPO

Punjab & Sind Bank, the only unlisted state-owned lender, has got market regulator Securities and Exchange Board of India’s (Sebi’s) nod for its estimated Rs 600-crore initial public offer (IPO) likely to hit the markets by November-end. The bank had filed the draft red herring prospectus on August 26.

Yesterday, Sebi gave clearance to the draft prospectus, market sources said.

The bank proposes to issue up to four crore equity shares of Rs 10 each for cash, at a price to be discovered through a 100 per cent book building process.

Currently, the government owns 100 per cent stake in the bank, with the bank being the only unlisted one among the 19 nationalised banks in the country.

The government would offload about 17.9 per cent of its stake through the IPO. Its holding would come down to about 82 per cent post the offer.

The fund proceeds would be utilised for business expansion. At the same time, the bank plans to increase its branch network from 918 to 1,000 by March-end.

In 2009-10, the bank had posted an 18 per cent jump in net profit to Rs 508.8 crore, as against Rs 431.1 crore previous year. Total income rose by 19 per cent to Rs 4,345.9 crore, while net interest income grew by 17 per cent to Rs 1,183.9 crore. Business rose by 37.9 per cent to Rs 81,894 crore during the last financial year.

In an effort to get higher participation from the bank’s employees, Punjab & Sind Bank is facilitating opening demat accounts for its 8,000 staff members.

The bank proposes to reserve 20 lakh equities for subscription by the eligible employees, as per details available with the draft prospectus filed with the Sebi.