SIB plans follow-on equity float soon

Thrissur-based South Indian Bank plans to raise Rs 150 crore through a follow-on public issue of equity shares to shore up its capital adequacy ratio (CAR).

The bank's CAR at the end of September 2005 was 10.28 per cent, up from from 9.90 per cent a year ago. The bank wants to increase its capital adequacy to 13 per cent by March 2006, said V A Joseph, chairman and CEO, SIB.

The bank would tap the market during January-March 2006 and is in the process of selecting merchant bankers to manage the proposed offer. The price would be determined through a book-building process, a bank official said.

The paid-up capital of the bank was Rs 47.68 crore as on September 30, 2005. The net worth increased from Rs 381.77 crore to Rs 468 crore due to rights issue of 1.19 crore equity shares of Rs 10 each at a premium of Rs 30 per share. The bank had also raised Rs 65 crore through issue of subordinated Tier-II bonds.

ICICI Bank is the largest shareholder in SIB with 11.25 per cent stake. Public holds 64.78 per cent, non-resident Indians 6.05 per cent, foreign institutional investors, including India Capital Fund, 4.19 per cent, according to the shareholding data filed with the National Stock Exchange (NSE).

ICICI Bank has indicated to the Reserve Bank of India that it would bring down its holding in both South Indian Bank and Federal Bank to below five per cent over an unspecified period. SIB shares today rose to Rs 66.75 as against Rs 64.50 on Monday on the NSE.