Dubai firm, Singapore govt may invest in AllBank float

The investment arm of the Singapore government and the Dubai-based Emirates Financial Services (EFS) would be investing close to Rs 170 crore in Allahabad Bank (All-Bank) through the bank's second public issue.

"The Singapore government through its three investment arms - the Government of Singapore Investment Corp, the Government of Singapore and the Monetary Authority have assured AllBank officials to invest around Rs 100 crore in the issue that opens on April 6," sources close to the development said.

"A leading institutional investor from Dubai, Emirates Financial Services (EFS) has also expressed its intent to offer Rs 70 crore for the second issue," he said.

AllBank, which missed out on the opportunity to offer its shares to foreign institutional investors (FIIs) through its initial public offer when it sold a portion of the government's stake at Rs 10 in 2003, has decided to offer 40 per cent of the issue size to qualified institutional buyers including FIIs on a discretionary basis.

AllBank executives in the last few days has been conducting road shows in Dubai, Singapore, London, Boston, and Hong Kong. Sources close to the development said that executives have tied up with the Dubai based financial institution as well as the Singapore government who have agreed to pump in the sum.

The bank has also targeted Japanese institutional investors from Hong Kong who, according to sources, are keen on taking a stake. The bank had, some times back received RBI approval for offering a portion of the issue to FIIs and NRIs with repatriation benefits out of the second public issue.

RBI has however imposed a restriction that post issue non-resident holding in the bank should not exceed 20 per cent of the paid-up capital of the bank.

Meanwhile, Life Insurance Corporation of India (LIC) has recently emerged the single-largest shareholder in AllBank after the government.

This was for the first time that any institutional investors had picked up substantial stakes in the company since it floated its initial public issue in 2003.

The public sector financial investor has cornered as much as 2.23 per cent of the bank's stake in the last three to four months.

Total FI holding in AllBank also increased to more than five per cent from less than one per cent in June 2004. The bulk of the stake was picked by institutional investors in the third quarter of the current fiscal when they picked up a total of three per cent stake in the company.