South Indian Bank plans Rs 150 cr float

South Indian Bank will tap the capital market with a follow-on public offer of equity shares to raise about Rs 150 crore to augment its capital.

"The objects of the issue are to augment our capital base to meet the future capital requirements arising out of the implementation of Basel II standards and the growth in our assets, primarily our loan and investment portfolio due to the growth of Indian economy and for other general corporate purposes including meeting the expenses of the issue," said chairman and CEO V A Joseph.

The total capital adequacy ratio of the bank was 10.28 per cent as at September 30, 2005, including tier-I capital adequacy ratio of 5.49 per cent and tier-II capital of 4.79 per cent. As per the Reserve Bank of India (RBI) stipulations, banks have to maintain a minimum capital adequacy ratio of 9 per cent.

The premium on shares of Rs 10 each will be decided through book building. The issue will open on February 10 and close on February 15 at a price band to be decided on February 8.

Of the fresh issue of shares, 10 per cent (Rs 15 crore) is reserved for allocation to eligible employees and another 10 per cent would be reserved for existing shareholders, leaving a net offer of Rs 120 crore for public. Of which, qualified institutional buyers (QIBs) quota will be up to Rs 60 crore.

Non-institutional portion is kept at Rs 18 crore leaving a retail portion of Rs 42 crore.

At the Bombay Stock Exchange, South Indian Bank shares gained 2.88 per cent to close at Rs 69.75 today.