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Two older generation unlisted private sector banks, Catholic Syrian and RBL (the latter earlier known as Ratnakar Bank) are set to go for an Initial Public Offering (IPO) this year.
Catholic Syrian Bank (CSB) plans to raise about Rs 300 crore from the fresh share issue. RBL Bank might raise Rs 800 crore.
The two banks have been advised by Reserve Bank of India over the past few years to gear up for an IPO. Now, the P J Nayak committee report on governance issues of banks says the two must list by December this year.
Rakesh Bhatia, managing director and chief executive officer of Thrissur-based Catholic Syrian Bank, said the company had begun preparing the IPO plan. “We have been meeting investment bankers but are yet to finalise on anyone. We will be hopefully doing it by June and then the process will start in full swing.”
The size of the IPO is expected to be around Rs 250-300 crore.
CSB had already got shareholder approval last year.
Bhatia said CSB had been working on strengthening its financials. “The bank had non-performing assets or bad loans at Rs 300 crore at the end of March. It had earlier shot up to Rs 420 crore in the middle of last year and we successfully managed to bring it down to Rs 300 crore by the end of the last financial year. We want to reduce it by another Rs 40-50 crore in the next two to three months and keep reducing it further.”
Kolhapur-headquartered RBL Bank has been also preparing its IPO plan. “We are looking at an IPO in the next nine-ten months, within this financial year,” said a bank official, requesting anonymity.
The size has not been decided but sources in the sector say it will be Rs 700-800 crore. The bank has started a rebranding exercise and gone through various changes to set the stage for an IPO launch. It has also been expanding aggressively — the 50 branches as of 2010 has expanded to about 175.
