UTI Bank plans share sale to raise funds | india | Hindustan Times
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UTI Bank plans share sale to raise funds

india Updated: Jun 02, 2007 02:28 IST

UTI Bank Ltd said on Friday it plans to issue up to 42.4 million new shares, which analysts said was a way for it to raise funds to meet capital requirements as the demand for loans rises.

The bank did not disclose the amount it planned to raise, but at Friday's close of 576.15 rupees per share, it could raise around 24.4 billion rupees ($600 million).

"The bank plans to raise equity to meet the increased capital requirements arising out of high growth and implementation of Basel II norms," said Vishal Goyal, analyst with Edelweiss Capital.

The bank said it would also raise its authorised share capital to Rs 5 billion from 3 billion, and make a preferential issue offer of 31.9 million shares to its promoters.

UTI Bank's move follows moves by larger private sector rivals ICICI Bank and HDFC Bank Ltd to raise capital through share sales.

Top private bank ICICI Bank plans to raise $5 billion in the country's biggest-ever share sale, while HDFC Bank said it would raise $1 billion.

Indian banks, which have been growing by about 30 per cent and expect strong growth in coming years, want more capital so they can raise lending to firms and individuals in the booming economy.