Maiden float on cards

Following the government's decision to write off its accumulated losses of Rs 3,830 crore, the state-owned Indian Bank is planning to go in for an initial public offer in 2007. Of the 27 sector banks in the country, only four banks are yet to be listed in the stock market.

K C Chakrabarty, chairman & managing director, said the bank has an equity capital of Rs 743 crore which needs to be trimmed to Rs 343 crore through a preferential issue.

However to convert part of its equity capital through a preferential issue, the Banking Regulation Act needs to be changed, which is to tabled in parliament during the monsoon session.

He added, "We have promised the finance minister, P Chidambaram that the incremental bad debts of the bank during the financial year would not be more than one per cent of the advances."

The bank's advances amounted to Rs 22,485 crore in 2005-06 which it estimates to increase by 28 per cent during the current fiscal while deposits is aimed to grow by 16 per cent from Rs 40,805 crore last year.