Dena price band at Rs 23-27

Dena Bank has set a price band of Rs 23-27 per share for its proposed second public issue. The bank will issue 80 million shares with a face value of Rs 10, the bank said in a stock exchange notice today.

After the issue, the government's stake in the public sector bank will drop to 51 per cent from 71 per cent at present.

The bank would then be unable to reduce the promoter's holding further. Dena Bank's share today closed at Rs 30.45 on the BSE, down from its previous close of Rs 32.00.

The issue is likely to hit the market in the third week of January and will mop up a maximum of Rs 216 crore and a minimum of Rs 184 crore.

The bank will be filing its draft prospectus with the Securities Exchange Board of India (Sebi) shortly.

The bank is raising capital to meet the stringent Basel II requirements, fund its asset growth and shore up its capital adequacy ratio (CAR). The bank's CAR was at 10.28 per cent on September 30 and will inch up to 12 per cent after the issue.

Other bank public issues lined up include that of Bank of Baroda (Rs 1,200 crore), Allahabad Bank, Syndicate Bank, Punjab National Bank.

Banks are all hungry for funds with the stringent Basel II provisioning norms expected to be put in place by December 2006.