Uti Bank Appoints Salomon To Rope In Ally

UTI Bank today appointed Salomon Smith Barney (SSB) as the investment bank for raising additional equity capital through a preferential allotment. The bank is looking at placing 15 per cent stake with a foreign investor in three-four months.

The decision was taken today at a meeting of the committee of directors. The bank is looking at getting a valuation of Rs 200 crore through this allotment which will help in increasing its capital adequacy ratio to around 12 per cent.

The bank had earlier kicked off the process of identifying new investors and the due-diligence by some of them had already started. Sources said that SSB might have been bought in so as the bank could get in better valuation for its stake sale.

Sources said three investors, including Chrysallis Capital, were in the race. JP Morgan is believed to have started conducting the due diligence for one of the investors.

AIG India Infrastructure Sectoral Fund, which was set to pick up about 5 per cent stake in UTI Bank at Rs 60 per share, pulled out earlier this year.

CDC Capital Partners, which holds 26 per cent in the bank, had asked UTI Bank to bring in a strategic investor acceptable to them by December 31 this year. UTI Bank had in September last year made a preferential issue at Rs 34 a share to CDC Capital Partners.