You are here: Home » Finance » News » Others
Business Standard

Punjab & Sind Bank IPO in early Dec

BS Reporter  |  New Delhi 

The initial public offer (IPO) of state-owned Punjab & Sind Bank (PSB) will hit the market early next month. It will be an issue of 40 million equity shares with a face value of Rs 10 each. The IPO will see an equity dilution of 17.9 per cent. The government stake in the bank will fall to 82.1 per cent after the offer.

“We are planning to launch it in the first fortnight of December. The funds will be used to scale up lending and meet our requirements for the next two-three years. Besides getting us capital for expansion, listing will put a lot of positive pressure on us to perform,” said Executive Director PK Anand.

PSB, the only unlisted public sector bank in India, may give a five per cent discount to retail investors and employees. The board is meeting next week to consider the proposal.

The bank was earlier planning to launch the IPO in July. It deferred the issue as the board had to rework plans in line with the government rule on minimum 25 per cent public shareholding. Later, the rule was relaxed, allowing the bank to go ahead with its earlier plan for 17-18 per cent equity dilution.

Anand, however, said the five-month delay proved to be a blessing in disguise as the markets were now looking better, especially after the Coal India issue, which “charged up public sentiments and retail investors came in a big way”.

The government owns 100 per cent stake in the bank. The bank has approached the government for a capital infusion of Rs 700 crore to shore up its Tier-I capital above eight per cent. It has not yet received any response from the government.

PSB had filed the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India in August. The market regulator gave its comments to the New Delhi-based bank on the DRHP. PSB will file a revised DRHP this week. SBI Capital Markets Limited, Enam Securities Pvt Ltd and ICICI Securities Limited are the book running lead managers to the issue.

In 2009-10, the bank posted an 18 per cent jump in net profit at Rs 508.8 crore, compared with Rs 431.1 crore in the previous year. Total income rose 19 per cent to Rs 4,345.9 crore while net interest income grew 17 per cent at Rs 1,183.9 crore and business rose by 37.9 per cent at Rs 81,894 crore.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, November 23 2010. 00:45 IST