Public sector Indian Overseas Bank (IOB) will hit the market in August, said bank officials. The issue is likely to issue equity shares at Rs 30, a premium of Rs 20 per share.
The bank had recently announced that its board of directors has approved the proposal for increasing paid up capital through issue of public issue of equity shares for Rs 100 crore.
Equity would rise from Rs 444.80 crore to Rs 544.80 crore, after obtaining necessary approvals from the Reserve Bank of India, the government and shareholders. The bank was yet to decide if it would be a rights issue or a preferential allotment.
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Approval from Securities Exchange Board of India (Sebi) would also be needed. Highly placed sources close to the development said the issue was likely to be priced around Rs 30 per share.
This will allow the bank to raise a total of Rs 300 crore of which Rs 100 crore will go into augmenting the capital base. No official confirmation to the pricing was however received.
Sources said factors like capital adequacy ratio, non-performing assets, net worth and other crucial aspects would have to be taken into account to determine the rights price. At present around 25 per cent of the bank