State-owned Punjab & Sind Bank today said it plans to raise about Rs 600 crore through an initial public offer, which is likely to hit market next month or early September.
"We are awaiting approval from the government for 25 per cent stake dilution. It can come any time. We hope to get approval next week," Punjab & Sind Bank Executive Director P K Anand told PTI.
As part of the IPO, he said, the government would offload 25 per cent stake against 17 per cent planned earlier.
Once the nod comes, it will take not more than one more week to file draft prospectus with SEBI, he said.
Taking that into consideration, the IPO should be out by the end of August or early September, he said, adding the bank expects to raise Rs 500-600 crore from IPO.
The fund proceeds would be utilised for business expansion. At the same time, the bank plans to increase its branch network from 918 to 1,000 by the end of March 2011
It is to be noted that the bank had earlier got approval from government to offload 17 per cent stake but later revised the stake dilution to 25 per cent. This was done following government's decision that all the listed companies should increase their public holding to a minimum of 25 per cent in a phased manner.
The equity dilution of at least 5 per cent annually was made mandatory for reaching threshold limit. The new norms relating to increase in public holding were issued last month.
Currently, the government owns 100 per cent stake in the bank. This is the only unlisted bank among 19 nationalised banks in the country.
The bank has appointed SBI Capital, ICICI Securities and Enam Securities as merchant bankers for its proposed IPO.
The government had restructured the equity structure of the bank in 2008. After the capital rejig, its equity capital came down to Rs 183.06 crore from Rs 743.06 crore.
In fiscal 2010, the bank posted an 18 per cent jump in net profit at Rs 508.8 crore compared to Rs 431.1 crore the previous year.
Total income rose by 19 per cent at Rs 4,345.9 crore while the net interest income grew by 17 per cent at Rs 1,183.9 crore and business rose by 37.9 per cent at Rs 81,894 crore at the end of 2009-10.
