If the plan fructifies, BoM will be the 15th of the 19 nationalised banks to get listed on the bourses. Indian Bank, Punjab & Sind Bank, United Bank of India and Central Bank of India are yet to draw up plans for floating a public issue.
The BoM issue, lead managed by SBI capital Markets, is expected to be priced at a premium of Rs 24- to Rs 27 over a face value of Rs 10 per share.
According to banking sources, the process of preparing the offer document and seeking government approval are underway. They added that the government stake will be reduced after the issue of fresh shares but the exact amount is yet to be worked out.
Around 10 crore shares are likely to be put on offer, added the source. While the exact premium is yet to be worked out, the bank might price the issue within a band having a floor and ceiling cap to it.
The bank had earlier proposed to come out with an IPO but shelved the plan.
According to an analyst, with capital becoming an essential ingredient for banks, especially for risk management and to comply with various prudential norms in line with the Basle guidelines, an IPO is ideal for the bank.
As on March 31, 2003, the capital of the bank stood at Rs 980 crore and it holds tier-II capital of Rs 599.28 crore.
The operating profit for the same period was Rs 520.58 crore, while net profit rose nearly Rs 77 crore to touch Rs 222.02 crore against Rs 145.41 crore in FY02.
During the current fiscal, several banks tapped the market to boost their capital base.
While UCO came out with its maiden public offering, Indian Overseas Bank and Vijaya Bank hit the market with a public offer of equity for the second time. All the three issues were heavily oversubscribed.
