Andhra Bank eyes Rs 850 cr via float

Andhra Bank will hit the capital market with its follow-on public issue of 8.5 crore fresh shares to raise around Rs 850 crore to fund its growth.

Andhra Bank shares closed at Rs 103.45 on the National Stock Exchange (NSE) today, up 8.38 per cent from yesterday's close.

The government's stake in the bank after the issue will drop to 51.55 per cent from the current 62.5 per cent.

Andhra Bank will join several other public sector banks, wherein the government stake has almost reached the floor of 51 per cent, which puts an end to further capital raising through issue of equity shares.

The public issue of equity shares through book building opens on January 16 and closes on January 20.

The bank's capital adequacy ratio is currently at 11.95 per cent and the fresh issue will provide it more headroom to raise tier-II capital through issue of subordinated bonds, chairman, K Ramakrishnan, told reporters.

The issue size constitutes 17.53 per cent of the post-issue fully diluted equity capital.

Ramakrishnan said though bank has maximum branches in Andhra Pradesh, it was not just a south-based bank. It has presence in top 200 business centres except Bihar, Jharkhand and North Eastern region.

The bank would open more branches, install onsite and offsite ATMs to expand business and reach. The bank would also open an office in Dubai, he said.

Its ratio of net non performing assets to net advances declined to 0.28 per cent as at March 31, 2005 from 0.93 per cent as at March 31, 2004. The ratio of net NPAs to net advances as on September 30, 2005 is 0.26 per cent.