UTI may raise $1 bn medium debt
UTI Bank, with equity valued at $1.8 billion, is in the process of getting ratings from Standard & Poor's and Moody's.business Updated: Jan 05, 2006 16:45 IST
UTI Bank may raise up to $1 billion through medium term notes to fund its global operations, its chairman said on Thursday, as it plans to open a branch in Singapore in the next few months.
"We have not put an exact number, but preliminary suggestions emanating from those who looked at the Singapore operations say it could be up to $1 billion," Chairman PJ Nayak told reporters on the sidelines of a news conference in Mumbai.
The notes could be raised in tranches, he added.
UTI Bank, with equity valued at $1.8 billion, is in the process of getting ratings from Standard & Poor's and Moody's.
UTI has tie-ups in the Middle East, but Singapore will be its first fully fledged foreign branch. Nayak said there was a need to focus on international operations due to rising remittances from Indians overseas and surging intra-Asian trade.
"You could witness a (stronger) rise in trade among the Asian countries than with other traditional trading partners," he said.
He said the bank would not go for acquisitions to expand abroad, but rather grow on its own strength.
Nayak ruled out an equity issue in the near future to fund expansion, even though UTI's capital adequacy fell more than it expected when it raised $257 million through global depositary receipts last year. Its capital adequacy is now 11.8 per cent.
"When we raised equity last time, we said that we would not like to have equity dilution for three years," said Nayak. "But it's going to be a challenge since we have grown a bit faster than we expected."
In the second quarter to September, UTI Bank more than doubled net profit to 1.09 billion rupees and its total assets grew 62 percent on the previous year, to Rs 414.63 billion.