Canbank Plans To Tap Market For Rs 700cr

Chairman & managing director J V Shetty, who is demitting office soon, is eager to float the public issue before his terms expires.

A senior officer of the bank said Shetty wants to complete all the pre-IPO (initial public offering) preparations to make the task of the next incumbent easier, since Shetty does not have enough time to complete the job himself.

The bank has tentatively decided to float a public issue of 50 lakh equity shares of Rs 10 each at a hefty premium of Rs 130 a share.

The premium may change, but will range between Rs 110 and Rs 130 a share, said a Canara Bank official, adding that most merchant bankers, who made presentations, have in-principle agreed with the management's perception on premium.

 

We have consistently declared profits, despite strictly following the prudential accounting norms of the Reserve Bank, and our secret reserves are more than enough to cover any adverse impact on profitability, the official said.

Since the Union finance ministry is expected to take a decision soon on allowing profitable banks to float public issues to increase their capital base, he said, the bank wants to keep everything ready for the IPO.

We will launch headlong into the market once the green signal comes.

Fourteen major merchant banks