State-run Punjab & Sind Bank may consider the participation of anchor investors for its initial public offer (IPO), through which the public sector lender targets to raise upto Rs 600 crore.
Punjab & Sind Bank would be the second government-run entity after Coal India (CIL) that may seek anchor investors to support its initial public offering.
"The bank may allocate up to 30 per cent of the qualified institutional portion, to anchor investors, on a discretionary basis," as per the lender's draft red herring prospectus (DRHP) filed with the capital market regulator Sebi.
As per the DRHP, the bank has reserved 50 per cent of the net issue for qualified institutional buyers.
Anchor investors are those investors, who buy shares of the company before the launch of the public issue. The concept of anchor investors was approved by Sebi last year.
Anchor investors, who cannot be a promoter of the issuer company, can be allocated as much as 30 per cent of the portion reserved for qualified institutional buyers. Also, such investors must bid for at least Rs 10 crore worth shares.
Punjab & Sind Bank is the only unlisted state-run lender. The bank proposes to issue upto four crore equity shares of Rs 10 each for cash at price to be discovered through a 100 per cent book building process.
We expect to raise something in between Rs 500-600 crore. Punjab & Sind Bank Executive Director P K Anand had said last week.
The issue is expected to hit capital market by the end of November or early December depending on regulatory clearances, he had said, adding the proceeds would be utilised for credit expansion.
The government would offload about 17.9 per cent of its stake through IPO and post offer its holding would come down to about 82 per cent.
Currently, the government owns 100 per cent stake in the bank and is the only unlisted bank among 19 nationalised banks in the country.
The bank has appointed SBI Capital, ICICI Securities and Enam Securities as merchant bankers for the IPO.
