Punjab & Sindh, UBI set for IPOs
The government’s disinvestment plan is on for public sector banks as well. P&SB and UBI, the only two banks which are still 100 per cent government owned, are due to launch IPOs of shares in the next three to four months.business Updated: Jul 12, 2009 22:44 IST
The government’s disinvestment plan is on for public sector banks as well. Punjab and Sind Bank (P&SB) and United Bank of India (UBI), the only two banks which are still 100 per cent government owned, are due to launch initial public offers (IPOs) of shares in the next three to four months.
Bankers and government sources said each bank would aim to raise about Rs 400 to 500 crore in the maiden offers.
While the government is likely to divest 15 per cent in UBI, details for P&SB’s IPO are yet to be worked out.
“We would need to restructure our capital base before hitting the market and this is a long exercise. We, at this juncture, cannot say how much we plan to raise from the IPO,” said SC Gupta, managing director of P&SB. The paid-up capital of the bank which is at Rs 1,532 crore would be reduced to Rs 266 crore under the restructuring plan.
“These two banks should be ready to hit the market in the next three months,” said a senior finance ministry official.
PSU banks, under pressure to increase their lending, are looking for additional capital.
The government is already on a plan to infuse between Rs 8,500 and 9,000 crore to help them boost their capital adequacy ratios linked to their loans which will give them more room to lend. At present public sector banks have a ratio of 12 per cent. The government holding in several other banks including Central Bank of India and UCO Bank is also high, close to 80 per cent in each. These banks may also hit the market at a later stage to boost their capital, say bankers.