Sumco in alliance with IDBI for IPO funding

Surendranagar-based Surendranagar Mercantile Co-operative Bank Ltd (Sumco Bank) has become the first co-operative bank in Gujarat to tie up with a financial institution to provide initial public offering (IPO) financing.

Sumco Bank had tied up with the Industrial Development Bank of India (IDBI) to fund the recent IPOs of Tata Consultancy Services (TCS) and National Thermal Power Corporation (NTPC).

"As far as we know, Sumco Bank is the only co-operative bank in the state that has a tie-up with IDBI to fund the two IPOs. Several of our customers got 50 per cent of the total amount required for the initial public offering share applications through the tie-up," said Sumco Bank manager Ramesh Thaker.

He said the demat account forms of IDBI are available at Sumco Bank branches and several customers have availed of the facility. While 175 customers secured loans for the TCS public issue, 225 received loans for the NTPC issue.

"This is the first time that the bank has tied up with IDBI for helping customers get loans for IPOs and this arrangement will continue," Thaker said.

Sumco Bank has also secured the approval to accept bills of the Gujarat Electricity Board (GEB) at the bank branches. "GEB is at present installing the required software, and Sumco Bank will start accepting GEB bills from January 14," Thaker said.

He said talks are on with Small Industries Development Bank of India to provide farm loans up to Rs 25 lakh without any collateral security.

Started in 1983, Sumco Bank has a head office in Surendranagar, with six other branches located in Surendranagar district. Sumco Bank has deposits of Rs 100 crore, with advances of Rs 57 crore.

The bank registered a net profit of Rs 1.11 crore in last fiscal.