OBC plans second public issue

Oriental Bank of Commerce is planning a second public issue to raise its equity share capital.

The Delhi-based public sector bank which has recently got Global Trust Bank merged with itself will join the league of public sector banks all of whom are coming out with second public issues over the next few months.

OBC will discuss the matter at a board meeting to be held on December 28, said the bank in a stock exchange notice. The bank's share price went up by 4.48 per cent on Bombay Stock Exchange to end the day at Rs 335.65.

Government of India holds 66.48 per cent stake in Oriental Bank of Commerce which will be diluted post the second issue. Public sector banks can dilute the Government's stake to 51 per cent.

So far only two banks "" Vijaya Bank and Indian Overseas Bank "" hit the market for the second time after their IPOs. A string of banks including Punjab National Bank, Dena Bank, Allahabad Bank, Bank of Baroda, Bank of India and Syndicate Bank have been waiting in the wings to enter the market. Chennai based Indian Bank and Kolkata based United Bank of India have also been planing for their maiden public issues.

All banks are in a need for capital with new Basel II risk norms that they have to comply with by March 2006. Increased credit offtake is yet another reason.

Bank of Baroda has announced a second public offer of 9.1 crore equity shares in January 2005 to raise around Rs 1,500 crore. Punjab National Bank is gearing up to issue up to 5 crore shares through a public offer, while Dena Bank will offer 8 crore shares and Bank of India is planning a 10 crore share issue.

Bank stocks have been on a roll in recent months with the Bankex gaining by as much as 40 per cent. The Bankex rose by as much as 1.44 per cent to 3,535 points today.