Central Bank of India is planning for an initial public offer (IPO) around September to strengthen its capital and for business expansion.
With the government making it clear that public sector banks will have to fend for themselves as far as capital infusion is concerned, Central Bank joins other peers such as the Punjab National Bank, whose Rs 169 crore public issue is currently on. Canara Bank is also planning a Rs 225 crore IPO in August and Union Bank of India a Rs 200 crore issue sometime during the next financial year.
The size of the Central Bank's public offer is to be decided once the financial results for the year ending March 31, 2002 are declared, sources in the know of developments said.
They said the IPO size will be fixed keeping in mind the capacity to service the capital. The unique selling proposition of the bank lay in the fact that it has a vast network (reach) of 3,110 branches spread across the country, it is making efforts at inter-connectivity to provide anywhere banking to customers and establishing new delivery channels such as ATMs and internet banking.
The bank, which posted a net profit of Rs 48 crore in the half-year ended September 30, 2001, is expecting to close the financial year with a Rs 150 crore net profit. It's net profit at Rs 46.46 crore in 2000-01 was down by 69.16 per cent over the previous year's net profit of Rs 150.68 crore, due to amortisation of the voluntary retirement scheme cost of Rs 139.08 crore.
The centre had contributed a total of Rs 1,798 crore in phases in the early 1990s to the capital of the bank to meet its operational requirements and comply with the capital adequacy norms prescribed by the Reserve Bank of India. The government has thus far pumped in Rs 20,446 crore into nationalised banks.
