Indian Bank files IPO papers

Chennai-based Indian Bank has said that it had filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for its initial public offer of 85,950,000 equity shares of Rs 10 each for cash at at a premium to be decided through 100 per cent book-building process.

The offer will constitute 20 per cent of the post issue fully diluted paid up equity capital, a statement said.

The bank has proposed to reserve 8,595,000 equity shares for allotment to employees and the balance 77,355,000 equity shares would constitute the net offer to public.

Of the net offer to public, 60 per cent shall be allotted to qualified institutional buyers, of which 5 per cent would be allotted to mutual funds.

Further, 10 per cent shall be available for allocation to non-institutional bidders and the balance 30 per cent shall be available for allocation to the retail investors on a proportionate basis.

The bank is raising money through IPO to augment its capital base to meet the future capital requirements arising out of the implementation of the Basel II standards and for other general corporate purposes.

SBI Capital Markets, Enam Financial Consultants, ICICI Securities and Kotak Mahindra Capital Company are the book running lead managers to the issue.

With a customer base of 18.1 million, Indian Bank, which is on its centenary year, had 1,408 branches in India and two overseas branches in Singapore and in Colombo, Sri Lanka as on September 30, 2006.

As on September 30, 2006, the bank's net worth was Rs 2601.68 crore and had assets of Rs 50,812.97 crore.

The bank's deposits have been growing at a compounded annual rate of 13.47 per cent during the last five fiscal years and net advances at a compounded annual rate of 18.97 per cent during the same period, said DRHP.