Public Sector banks to go private
The Government has decided to shed equity in five public sector banks in the next four months. These banks include Punjab National Bank, Allahabad Bank, Andhra Bank, Indian Overseas Bank and Punjab & Sind Bank. The equity would be divested through initial public offers, the only mode of divestment permitted by nationalised banks under the existing policy.
In each of these banks, the government currently holds 100 per cent equity stake. The total equity capital of these banks works out to Rs 246.7 crore for Allahabad Banks, Rs 347.95 crore for Andhra Bank, Rs 333.60 crore for IOB, Rs 212.24 crore for PNB and Rs 243.05 crore for PSB.
The government has cleared these offerings following the buoyant response to the recent offering from Syndicate Bank, which was oversubscribed several times. Though some people consider the Syndicate Bank offering to be under-priced, government officials say that the oversubscription indicates a clear appetite for bank offerings, which could be exploited through better pricing.
The Syndicate Bank offering was aimed at testing the market appetite. The proposed offerings will further set benchmarks for offerings from banks where the government holding is close to the 51 per cent threshold. The price discovery is expected to help the government in its consequent bank offerings, as also keep alive interest in bank shares. Government officials say that banks offerings have proved to be good buys.
Source : MI
Nov 17, 1999 |
