Allahabad Bank today said it is planning to raise Rs 100 crore through private placement of debt next month. The bank also proposes to raise Rs 100 crore through an initial public offer by December.
The bank plans to dilute government holding to 72 per cent through the IPO, chairman B Samal said, adding employees would be offered 10 per cent of the total 28 per cent additional equity offered through the public issue. At present, the bank has an equity base of Rs 246 crore.
Samal said the bank has appointed SBI Caps, Allianz, Kotak Mahindra, and ICICI Securities as merchant bankers to price the issue. "We will file an application with the Securities and Exchange Board of India (Sebi) within 2-3 weeks," the Allahabad Bank chief said. After the IPO, the bank's capital adequacy ratio is slated to go up to about 11 per cent from 10 per cent at the end of March this year.
The bank also plans to mop up Rs 100 crore through private placement of subordinated debt to raise its Tier-II capital for which it is awaiting the regulator's nod. The private placement and IPO are intended to increase the capital base of the bank and enable it to expand business by 20 per cent to Rs 41,500 crore by this fiscal.
"The bank plans to increase its business to Rs 53,000 crore by 2005," Samal said, adding the deposit base is targeted to go up to Rs 35,000 crore while advances would surge to Rs 18,000 crore by 2005.
The Kolkata-based bank also targets to reduce non-performing assets to 9 per cent from 10.4 per cent in March 2002. The bank has decided to issue 60 notices to loan defaulters whose aggregate dues amount to Rs 700 crore, Samal added. "The bank is targeting to reduce NPAs to less than per cent by 2005," he said.
As part of the retail thrust, Samal said the bank is talking to ICICI Prudential Life for selling its products through the bank's branches. He said the bank plans to open 100 more 'boutiques' which offer wide spectrum of financial products under one roof. "We want to take the number to 2,000 from the present 257 boutiques," he added.
The bank targets to increase its retail portfolio to Rs 3,500 crore by 2005 as part of vision 2005.
Allahabad Bank has asked Institute for Development and Research in Banking Technology to assist in technology upgradation. The bank has engaged software companies like TCS for developing banking software.
