Seven bankers to host BoB public issue

Seven merchant bankers are set to join hands for the Bank of Baroda (BoB) issue which is to hit the market shortly.

The investment bankers acting as lead mangers to the issue are DSP Merrill Lynch, JM Morgan Stanley, Enam, Kotak, HSBC, SBI Caps and Karvy.

This is one of the largest number of investment bankers acting as lead mangers for a single issue. The Punjab National Bank (PNB) issue had five lead mangers: Kotak, JM Morgan Stanley, Enam, DSP Merril Lynch and ICICI Securities.

A BoB executive, in charge of the issue, confirmed the development. Post issue, the government's stake in the public sector bank would get reduced from the current holding of about 66 per cent to about a little above 51 per cent.

The government holds about 29.33 crore equity shares of the bank and the number of shares it can sell amounts to about 4.65 crore. According to the current market price of Rs 148, (Friday's closing price), the size of the issue would work up to Rs 1,160 crore.

"The Bank of Baroda issue would be the first major book building issue to go by new Sebi norms, which will be applicable to all draft offer documents filed with the regulatory authority on or after September 19," said a leading investment banker, who expressed apprehension about the new norms.

The new Sebi guidelines include doing away with discretionary allotment for qualified institutional bidders (QIBs) and the introduction of 5 per cent reservation for domestic MFs.

The allotment for QIBs would be in proportionate basis such as in the case of HNIs and retail investors. Sebi has also made it mandatory for QIBs to pay 10 per cent margins while applying for IPOs.