Jkb Files Papers For Rs 70 Crore Public Issue

The Jammu and Kashmir Bank (JKB) on Friday filed the prospectus with the registrar of companies for its maiden Rs 70.30 crore public issue on receiving the Securities and Exchange Board of India nod.

The issue is slated to open on May 13. The bank will issue 1.85 lakh equity shares at a premium of Rs 28 per share, the face value of the share being Rs 10.

Following the public issue, the state governments stake in the bank will drop to 53.14 per cent from the current level of 85 per cent. According to the merchant bankers, Although it is entering the market amidst uncertainty, the issue will be successful since the banks financials are strong.

The current equity of the bank stands at Rs 30 crore and with the additional equity, through the public issue, the bank will be able to lend for larger projects, said merchant bankers.

The issue will be listed at the Bombay, Delhi, Ludhiana and National Stock Exchange.

JKB posted a net profit of Rs 25 crore for the first half of the financial year and is expected to post a net profit of Rs 50 crore for the entire 1997-98, a source said.

During the same period the non-performing asset of the company has shown a decline from six per cent to 4.2 per cent, sources said.

The bank had issued bonus shares in the ratio of 1:1 on December 11, 1997. On the same day there was a rights issue which was priced at Rs 24 which included Rs 14 as premium. The rights issue of 70 lakh shares was to raise Rs 16.80 crore.

Following this, the bank issued preference share on January 21, which was priced at par with the forthcoming public issue. The bank raised a sum of Rs 34.20 crore through the preference issue amounting to 90 lakh shares.

The governments holding had dropped to 79.88 per cent following the rights and the bonus issue which was brought up to 85 per cent following the preference issue.