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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (9731)	11/22/1999 1:45:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

$100 million BoB ADR issue next fiscal bankofbaroda.com (Tuesday, November 23, 1999) Sourav Majumdar & Mahuya Paul in Calcutta-BS The Bank of Baroda (BoB) is firming up plans of launching an issue of American Depositary Receipts (ADRs), to raise over $100 million, sometime in the second quarter of 2000-2001. The bank also favours limiting the government stake in it to 26 per cent. This will, of course, be subject to the passing of the Bill bringing down the government?s stake in public sector banks to below 51 per cent. The government currently holds 66.22 per cent of BoB?s capital. The public holding in the bank, which is listed on the bourses, is 12.67 per cent. Speaking to Business Standard, K Kannan, chairman, BoB, said he favoured an ADR issue over a global depositary receipt (GDR) since the ADR market was a "deeper and bigger market" and a number of institutional players there already knew BoB by virtue of their operations in India. "ICICI has already shown the way in the ADR market. We will be the first nationalised banks to tap that market after ICICI", Kannan said. "Besides, there are a whole lot of software corporates and professionals with Indian background, who would be very keen to put money into our ADRs". The BoB chairman also said the bank?s accounts were being recast in line with international standards, for which the services of a consultant may also be necessary. Also, frontline investment banks were also wooing the public sector bank for the overseas float mandate. He said of the BoB equity base of Rs 296 crore, Rs 196 crore is held by the central government. This amount would finally have to work out to a 26 per cent stake, which means the BoB capital would then have to expand to around Rs 800 crore. "This can be achieved in two tranches, where the government stake comes down in phases", he said, adding everything depended on the legislation on the subject, expected to be brought before Parliament by the government shortly. The BoB chairman said he had no problem if the government contributed further to the bank?s equity. But if the government wanted the bank to go to the public, the question of the government stake would then come into the play. "You can't have the bank accessing the public with the government stake unchanged. It will then have to go down proportionately", he said. Kannan, who is slated to retire at the end of this month, said June to September 2000 would be the best time for the overseas issue, since foreign institutional investors traditionally invest at that time in new issues overseas and there would be a healthy appetite for the bank?s issue at the time. BoB's capital adequacy stood at 13.30 per cent as at March 31, 1999.