Indian Bank eyes Rs 900cr mop-up via IPO

Chennai-based Indian Bank is bullish about its maiden public issue that is likely to hit the market in January to raise Rs 800-900 crore, as investors have never lost money in the IPOs of public sector banks.

"In the IPOs of public sector banks, no investor has lost money. All have made good money (from the investments)," K C Chakrabarty, chairman of Indian Bank, said.

The bank has filed the draft red herring prospectus with market regulator Sebi for the proposed public offer of 85,950,000 shares of Rs 10 each for cash at a premium to be decided through book-building process.

"We expect the get Sebi approval for the IPO by the first week of January," Chakrabarty said.

He was optimistic that the IPO would get a good response from investors, as the bank was consolidating its businesses and improving efficiency in operations.

As there was no progress on merger and acquisition of PSU banks, it has adopted the alliance model to give best service to customers while cutting down operational costs.

A few months back, the bank had struck an alliance with Delhi-based Oriental Bank of Commerce and Mumbai-based Corporation Bank to share each other's infrastructure and to jointly do business to face competition.

Indian Bank expects an increase of 17-18% in business, 25-30% in credit and 17-18% in deposits.

Total business stood at Rs 70,000 crore as of September 2006 and the net profit grew 38% to Rs 334 crore in the first half of FY07.