The Punjab National Bank (PNB) has decided that the premium on its maiden public issue will be in the band of Rs 71 to Rs 85 per share which will make the issue size in the range of Rs 497 crore to Rs 595 crore.
Sources said that although the bank has received a nod from the Securities and Exchange Board of India, it had not yet decided on the timing of the issue.
The post issue government holding will drop from 100 per cent to 75 per cent. Of the 25 per cent, which will be offloaded in the market, the bank has decided not to allot a separate quota for foreign institutional investors.
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According to the issue structure planned by the bank, 10 per cent is reserved for the bank employees, five per cent for mutual funds, 20 per cent for banks and financial institutions and 10 per cent for non-resident Indians. The remaining 55 per cent will be reserved for the public, said sources. The bank plans to issue three crore shares in the capital market.
Punjab National Bank has received nod from the central government for expanding its equity, after the bank decided return Rs 138 crore to the government.
The bank has decided to hit the capital market after the budget and the monetary policy for the current fiscal area announced. The scrip of the bank will be listed at Mumbai, New Delhi, Jaipur, Ludhiana and National stock exchanges. ICICI-Securities has been appointed the lead co-managers to the issue. PCS has been appointed as registrars to the issue.
Among those banks expected to come out with issues to hit the capital market for expanding their equity base are IDBI Bank, UTI Bank, Times Bank, Centurion Bank and the state-owned Jammu and Kashmir Bank. Jammu and Kashmir Bank has decided to hit the market with the issue size of Rs 70 crore and at a premium of Rs 28 per share. Private sector banks have been asked by the Reserve Bank to tap the market in the current fiscal. They were given extensions earlier.
According to a leading merchant banker, "Although the primary market continues to remain depressed, the investing community has shown preference for bank stocks.
This is reflected in the success of the State Bank of Bikaner and Jaipur, State Bank of Travancore, IndusInd Bank, ICICI Bank, Bank of India Bank of Baroda and Corporation Bank."