TimesBank to hit market with Rs 35-cr issue
Nandu:
Check this IPO out,offer price Rs.10 book value Rs.17.00.Well then again Federal Bank is selling for Rs.30 in the open market with an approximate book value of Rs.169.00!
Regards
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Our Mumbai Bureau
10 JUNE
TIMESBANK has decided to hit the capital market with a Rs 35-crore maiden public issue at a price of Rs 10 per share. The offer price, which is Rs 5 lower than the earlier envisaged Rs 15 per share, reflects the changed market conditions following the political uncertainties and tension on the country's border with Pakistan. The issue will be open for subscription on June 30.
The TimesBank public issue will be the first 'par issue' by a new private sector bank with a three-year track record of profits. The bank has received clearances from the Securities & Exchange Board of India and the Reserve Bank of India for the issue.
Confirming this to The Economic Times, Nani Jhaveri, managing director of TimesBank, said: ''Earlier this year, when we filed our prospectus with Sebi, we had indicated a price of Rs 15 per share, which was an attractive price in the then prevailing market conditions. Market conditions have since changed considerably with the dissolution of Parliament and the tensions on the border. There has also not been much improvement in the market appetite for bank shares. As you are aware, most bank shares are currently being quoted at a discount to the issue price.”
''Additionally, the promoter group (The Times of India Group) has always believed in the philosophy of 'invitation pricing'. They have been offering their products, which are all market leaders in their own segments, at affordable prices for the customer. They believe in guarding the price line while offering the best value to their customers. We, therefore, also decided to adopt the 'invitation pricing' philosophy for the issue by offering the shares at par. We believe this will reward the investors who will be our long term partners in business,” he said.
The maiden public issue will bring down the promoter's stake in TimesBank from the current 100 per cent to 75 per cent, while the post-issue capital adequacy of the bank will stand at 10.84 per cent against the current 9.98 per cent. ''We have added value to the bank, which is reflected in the book value at Rs 17,” Mr Jhaveri said.
The bank management has also decided to keep aside 12.5 lakh shares for the TimesBank employees and its whole-time directors.
TimesBank will be the eighth of the nine new private sector banks to enter the market with an equity issue.
While Global Trust Bank, HDFC Bank and Bank of Punjab had come out with par issues before achieving the three-year profit track record — required to qualify for charging a premium — IndusInd Bank, ICICI Bank, UTI Bank and IDBI Bank tapped the market with premium issues.
Public sector banks such as State Bank of India, Oriental Bank of Commerce, Corporation Bank, Bank of Baroda, Bank of India, Dena Bank, State Bank of Travancore and State Bank of Bikaner and Jaipur have also come out with premium issues. TimesBank net profit up 15% to Rs 27 crore - ET Online, May 17, 1999
economictimes.com |
