The bank is going to raise over Rs. 1300 crore through this FPO. The Govt. stake in the bank will reduce from current 80% to 70% after the issue. Present equity capital of the Chennai headquartered bank is Rs. 429.77 crore of which 80% is held by Govt.
Indian Bank is in the process of filling the draft prospectus and appointing book running lead manager (BRLM) for the issue. The issue is expected to be launched in the month of August 2011.
The bank is going to use the money to raise the Tier-1 capital which currently stands at 11.02% on March 2011. Tier 1 capital includes equity capital and disclosed reserves. With the issue capital, the bank will have close to Rs. 3000 crore as additional tier 1 capital and can increase the loan book by Rs. 20,000 to 25,000 crore.
The share price of Indian Bank is currently hovering at Rs. 233. So, the issue price per share is offered at discounted price.
Last fiscal, union govt. had diluted their share in union Bank and Punjab and Sind Bank through IPO and this fiscal, Indian Bank is the first public sector issue.
For financial year ending March 2011, total income of the bank stood at Rs. 10542.92 crore against Rs. 9030.78 crore during the same period last year. This is a 16.74 per cent y-o-y growth.
Net profit for financial year 2010-11, ending March 2011, is reported at Rs. 1714.07 crore, a growth of 10.23 per cent.