United Bank files DRHP with Sebi

Public sector lender United Bank of India (UBI) today filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for its initial public offer (IPO).

The bank has submitted its DRHP with the Sebi to come out with an IPO, an UBI spokesperson said.

The PSU bank had earlier said it was slated to hit the capital market by January-end or early February 2010 to mop up about Rs 350-400 crore of fresh resources depending on the premium that would be decided by the merchant bankers.

The bank proposes to issue 5 crore equity shares with a face value of Rs 10 each at a premium. Post IPO, the government's stake in the bank will decline to around 85 per cent.

The government has already allowed UBI to recast its capital and reduce the paid-up component to Rs 266 crore from Rs 1,532 crore as a precursor to the IPO exercise. The change will be reflected in UBI’s books after December.

After the capital restructuring exercise, the book value of a UBI share will be Rs 104 and on this basis, the minimum premium could be Rs 60 per share over a face value of Rs 10 each, UBI's Chairman and Managing Director S C Gupta had told earlier.