Indian Bank to fix IPO price at Rs 60/share

Indian bank, which is raising Rs 600-1,200 crore through IPO sometime in September,  is likely to price its initial public offer (IPO) at about Rs 60 a share.

"The bank's IPO will hit the market before September end. The premium is likely to be Rs 50 on a share of face value Rs 10," a top Indian Bank executive said.

The bank is yet to appoint merchant bankers to value its shares. It has also not decided whether or not the issue would be priced through the book-building route.

The size of the maiden issue will be in the range of 10-20 crore shares and the final offer price could be at about of Rs 60 per equity share, the bank official said.

The government equity is slated to come down to 70% post IPO.

The bank has raised Rs 300 crore in Tier-II capital last fiscal and has a capital adequacy ratio of 14%.

Indian bank is now on a sound footing with business expected to grow by 20% to Rs 66,000 crore from Rs 55,000 crore in 2004-05.

Indian bank is focussing on the retail segment for growth in the current fiscal.

"Our retail lending was 29% of the total credit portfolio, which we want to increase to 50% by March 2007," the senior offficial said.

Despite the fall in bond prices last fiscal, the bank has been able to increase its profits marginally to Rs 408.48 crore from Rs 405.75 crore in 2003-04.

Indian Bank has also set an ambitious target of bringing 500 branches under the core banking solution platform from the present 11-12 branches so as to bring down operating costs and increase efficiency.