BoR plans Rs 100 cr preferential issue

Bank of Rajasthan (BoR) is expected to place shares worth Rs 100 crore with two private equity investors or foreign institutional investors (FIIs) by December.

Eight entities are believed in the fray to pick up a stake through the preferential route in the bank. The list includes DBS Singapore, New Bridge Capital and Chryscapital, market sources said .

The bank today informed the Bombay Stock Exchange that it is exploring the possibilities of augmenting its capital by allotment of equity shares on preferential basis to the extent of 14.99 per ent to FIIs/ mutual funds / private equity investors among others.

Pravin Kumar Tayal, chairman, said the bank is looking for a preference issue. According to him, the bank's assets are growing at a rate of 30 per cent and to support this growth and maintain comfortable capital adequacy, the bank has decided to make preferential allotments.

The shares could be priced at around Rs 70. Form a low of Rs 33.55 on October 2, the stock hit a high of Rs 47.45 on September 9 2004. The stock on Wednesday closed at Rs 40.60.

After the allotment, promoters' holding in the bank will reduce to 38 per cent from 46 per cent, Tayal added. Currently, the bank is evaluating the bids, said Tayal.

Post allotment, the paid-up capital will increase to Rs 123 crore from Rs 107 crore. The preferential issue is expected to boost the capital adequacy to around 12.50 per cent from 11 per cent, the chairman said.

The bank's net profit in the quarter ended June 2004 dipped by 21.25 per cent to Rs 20.15 crore against Rs 25.59 crore in the corresponding period last quarter. Its total income stood at Rs 155.45 crore against Rs 158.42 crore. The bank's non performing assets for the quarter ended June 30 stood at 2.98 per cent.

Goldman Sachs had earlier acquired a stake in the bank. The counter has witnessed a block deal of 22 lakh shares on October 1where Merrill Lynch Capital Market bought 14 lakh shares at Rs 41.28 per share.