SBH public float by December

State Bank of Hyderabad (SBH) might issue bonus share to SBI, its parent, before hitting the market with its maiden public offering this December, though subject to clearance of the State Bank of India Subsidiaries Amendment Act by parliament.

Amitabha Guha, managing director, SBH, said, "We are expecting the State Bank of India Subsidiaries Amendment Act to be cleared during the current parliament session. Once it is cleared, we might come up with our pubic issue in December." But before the pubic offering, the bank might also issue bonus share to SBI, he added.

"The current book value of a Rs 100 share is Rs 12,255. We are even exploring the opportunity of issuing bonus shares to SBI to reduce the book value per share," he explained.

The issue might otherwise become too costly, hinted a senior bank official.

The bank's IPO would be at a face value of Rs 10 and the bank expects to command a price double of the book value, Guha hinted.

Once parliament clears the amendment act, the bank plans to appoint consultant to do the valuation, he added.

The bank's authorised capital is Rs 50 crore.

Meanwhile, the bank has set a target of increasing total business by Rs 12,000 crore during the current financial year from last year's Rs 55,000 crore.

The bank is also eyeing to reduce its gross non-performing asset (NPA) to below 1.70 per cent by the year end from current figure of 2.10 per cent, whereas it seeks to net NPA is targeted at 0.20 per cent from current figure of 0.36 per cent.

The credit deposit ratio of the bank in 2005-06 was 61.83 per cent.

Guha also informed that the bank has headroom for raising Rs 500 crore subordinate debt, though the bank does not have any concrete plan to raise it immediately.

Capital adequacy ratio stood at 12.08 per cent as on March 2006.

SBH will add 25 new branches during the year, he added.