Uti Bank Plans To Divest 25% Of Utis Stake

UTI Bank Ltd, promoted by Unit Trust of India, General Insurance Corporation and Life Insurance Corporation, is considering to disinvest 25 per cent of Unit Trust of Indias equity holding by offering it public.

Confirming this, the senior bank officials said, The banks management is contemplating to disinvest 25 per cent of 100 crore which is held by the Unit Trust of India, while the General Insurance Corporation and the Life Insurance Corporation, which hold Rs 7.5 crore each are not likely to disinvest its equity from UTI Bank.

In conformity with the guideline set by the Reserve Bank of India, UTI Bank has decided to enter the capital market before the end of March 1998.

The issue expected to be sized at Rs 25 crore is likely to offer share price in the range of Rs 25 to Rs 30.

The bank has a paid up capital of Rs 115 crore and the authorised capital stands at Rs 300 crore. Since the bank is likely to disinvest its equity, the paid up capital of the bank will stand at Rs 115 crore even after the public issue, said sources.

The bank had posted a net profit of Rs 15 crore for the financial year 1996-97 as against Rs 23 crore projected for the same period. Reportedly the drop in the profit was due to the banks exposure in the CRB group, for which they made provisions in the balance sheet of 1996-97.

Meanwhile the bank has decided to open 35 branches by the end of the March 1999 while the presently the bank has a network of 18 branches across the country.