United Bank fixes IPO band at Rs 60-66

State-run lender United Bank of India (UBI) today said it has fixed the price band at Rs 60-66 of its initial public offering, scheduled to hit the market by end of this month.

"We have set the price band at Rs 60-66. The bank has chalked out a roadmap to scale up operations on various fronts. From being an East-focused bank, we want to expand operations pan-India," UBI Chairman and Managing Director S C Gupta told reporters here.

At the upper end of the price band, the issue will fetch Rs 330 crore that Kolkata-based lender intends to use to augment capital base and propel its ongoing expansion plans.

The bank plans to sell 5 crore shares with a face value of Rs 10 each in the market through the initial public offering (IPO).

This will dilute 15.8 per cent of the government holding in the bank. Post-issue, the government will have 84.2 per cent shareholding in the bank.

The IPO, which will open on February 23 and close on February 25, has allocated not less than 30 per cent of the net issue to retail investors and 60 per cent to QIBs.

Central Bank of India was the last public setor bank to get listed. With UBI going public, now Punjab & Sind Bank will be the sole state-owned un-listed bank.

UBI has also reserved 25 lakh shares or 5 per cent of the total issue for its employees on a proportionate basis.

The book running lead managers of the bank are SBI Capital markets, Edelweiss capital and Enam Securities.

Going ahead, the bank plans to open new branches pan India and strengthen its business, particularly in the corporate and retail loan segments, Gupta said.

As part of its expansion plans, UBI had recently opened a representative office in Dhaka and may look at centres like Dubai and Hong Kong to open repo offices moving ahead.

Corporate advances currently contribute 50-51 per cent of UBI's total loan-book, retail 11 per cent, agricultural loans 12 per cent and loans to micro small and medium firms around 13 per cent.

The portion of current, savings account deposits to the total deposits is at 33.95 per cent.

The bank has a provision coverage ratio of 71 per cent, above the Reserve Bank requirement of 70 per cent, Gupta said.