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Indian Bank appoints merchant bankers for its FPO

21 May 2011 Evaluate

Indian Bank has appointed merchant bankers for its Rs 1,600 crore follow-on public issue.  The bank has received 14 applications out of which it has selected 4 merchant bankers. SBI Capital Markers, Kotak Mahindra Capital, ICICI Securities and Enam Securities are the four merchant bankers who are appointed for the bank’s FPO.

Besides, Indian Bank - which aims to hit the market with its follow-on public offer (FPO) by end of August or early September, will file its initial papers for its FPO in the second week of July. The bank has received the approval of Government of India to raise an additional equity capital of Rs 61.40 crore through book-building process by its follow-on public offer (FPO), comprising 6.14 crore equity shares of Rs 10 each at a premium to be decided by the bank. Following the FPO, the government holding in the bank will come down to 70% from 80%.

The bank has recently increased its base rate by 50 basis points (bps) to 10.00% p.a. from its existing 9.50% p.a. with effect from May 05, 2011 in line with the hike in key interest rate by Reserve Bank of India (RBI). It also increased its Benchmark Prime Lending Rate (BPLR) by 50 bps and will be 14.25% p.a. from its existing 13.75% p.a. with effect from May 05, 2011.

The bank reported a 7% rise in net profit at Rs 438.85 crore for the quarter ended March 31, 2011 as compared to Rs 409.95 crore in the same quarter previous fiscal. Total income of the bank had increased by 24% to Rs 2,865.8 crore for the quarter from Rs 2,317.72 crore in the same quarter in the last year.

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