Allahabad Bank to raise Rs 700 crore through float

The Kolkata based Allahabad Bank is likely to raise Rs 650-700 crore from the market in its second trench of public offering.

Allahabad Bank chairman and managing director O N Singh disclosed this to the reporters here during the announcement of the banks third quarter result.

The bank has booked a more than 60 per cent jump in net profit in the quarter ending December 31. The profit has grown from Rs 98.36 crore in the third quarter of 2003-04 to Rs 159.25 crore in the corresponding period of 2004-05.

Allahabad Bank CMD informed that buoyed by the good showing, it is gearing up to raise near to Rs 650 to Rs 700 crore in the second week of March 2005.

"It will be a book build public issue with a price band," he said. Allahabad currently have a book value of Rs 58.08.

Incidentally, Allahabad Bank is planning the issue for last couple of months. The Union government is further divesting around 21 per cent in the bank, following which its holding will go down to 55 per cent from present level of 76 per cent.

The paid up equity of the bank is Rs 346 crore that implies that the size of the offering would be around 7-8 crore shares.

Pointing to the performance of the bank, Singh said that the income of the bank has grown by more than 10 per cent from Rs 814 crore in the third quarter of 2003-04 to Rs 897.80 crore in the same quarter of the current financial year.

The interest income has also grown from Rs 665.59 crore to Rs 821.76 crore during the same period.

"Our spread has improved considerably from 3.35 per cent in December 2003 to 3.60 per cent in December 2004. The business increased by a robust 37.74 per cent in year to year basis against just 9.84 per cent in the corresponding period of the last year," added Singh.

Expressing optimism about the fourth quarter he said that its business is likely to grow at 27 per cent and likely to exceed Rs 61,000 crore by March 2005.