Indian Bank plans to raise around Rs 1,600 crore through a follow-on public offer (FPO), expected by mid-2011. The proposed fund-raising is aimed at supporting the business target of Rs 5 lakh crore by 2015, according to a senior bank official.
Speaking to Business Standard, T M Bhasin, chairman and managing director, Indian Bank, said the bank had got the board’s approval.
“We will dilute around 10 per cent to raise the money’, said Bhasin. He added the bank would prepare the draft red herring prospectus in April and hit the market by June. The government holds 80 per cent in the bank.
“We are looking at a share premium of 1,500-1,600 for Tier-I capital and the same can be exploded in Tier-II, and this includes Tier-II bonds,” he said.
“By 2015, we are looking at an infusion of Rs 12,000 crore, or 12 per cent of the credit, along with the profit,” said Bhasin.
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The capital infusion would support the business target of Rs 5 lakh crore, which included Rs 2.20 lakh crore credit and deposits of Rs 2.30 lakh crore, he said.
Total business rose to Rs 1,67,980 crore, as against Rs 1,33,987 crore in September 2009, up 25.37 per cent. By 2015, the bank plans to expand the number of branches to 2,500 from 1,804. Also, number of employees will be increased to 25,000 from 19,000.
Recently, the bank got a nod from the Central Bank of Srilanka to open a branch in Jaffna, expected around January 2011. With a branch in Colombo, it is planning to add two more in the country.
“Capital requirement in Sri Lanka is 300 crore Sri Lankan rupees. We already have 350 crore. By December 2011, we will increase it to 500 crore,” said Bhasin.
About net non-performing assets, he said the bank was planning to bring down the gross NPAs to less than one per cent, as against 1.45 per cent in June.