Indusind Shares Trading At Rs 40 In Grey Market

Shares of IndusInd Bank Ltd are trading at Rs 40 in the grey market which is Rs 10 lower than the issue price of Rs 50.

The bank is planning a premium float and also a preferential issue at par in the ratio of one share for every two held.

Sources point out that the price at which the share is traded in the grey market might have a bearing on the offering premium.

IndusInd, which posted a net profit of Rs 73.32 crore for the year ending March 31, 1997, representing an increase of 60.71 per cent over the previous year, plans a public issue of Rs 45 crore.

 

The float is slated to hit the market some time in August or September this year.

Solomon Raj, managing director, IndusInd, had said at a press conference recently that no decision has been taken on the premium.

But there are indications that the premium could be in the region of Rs 30 to Rs 40.

In case the share continues to trade at Rs 40, the bank may have to peg the premium at Rs 30.

A sub broker who trades in IndusInd shares said: There is buying interest at Rs 40 but anything above that the buyers are not interested. A few trades have taken place at Rs 40.

The buyers are picking up shares to avail of the preferential issue at par. The preferential issue is yet to be cleared by the Reserve Bank of India.

IndusInd plans to issue one crore equity shares of the face value of Rs 10 each at par to the holders of 2 crore equity shares which were picked up at a premium of Rs 40.

The promoters who had picked up the shares at par will not get the benefit of the preferential issue.

During the last financial year, while deposits grew from Rs 1,412.23 crore to Rs 3,093.1 crore, advances increased from Rs 1121.19 crore to Rs 1,927.65 crore.

On account of the lower growth in credit off take, the credit deposit ratio fell from 72.03 per cent in March 1995 to 62.32 per cent.

While the interest cost of deposits has gone up from 7.93 per cent in 1995 to 11.33 per cent, there has been a corresponding increase in the yields on advances from 14.46 per cent to 19.64 per cent in the corresponding period.