Punjab & Sind Bank (PSB) IPO to raise Rs. 480 cr, to be listed by Dec-end

Punjab & Sind Bank (PSB) would be listed on bourses by the end of this month and is likely to raise Rs. 480 crore through its initial public offer (IPO), a senior bank official said today.

“The public issue is likely to be listed by the end of this year,” PSB Executive Director P K Anand said during its IPO roadshow here.

Through the issue, priced at Rs. 113-120 a share of Rs. 10 face value, the century-old lender will issue fresh equity worth 17.93 per cent, or 4 crore equity shares. The net issue, however, will only be 17.04 per cent.

At the lower end of the price-band, the issue will fetch Rs. 452 crore to the bank, while on the upper end, it will mop up Rs. 480 crore.

The IPO proceeds would be utilised for business expansion. The funds raised would take care of the bank’s credit growth requirement over the next two to three years.

“Post the issue, which will open on December 13, the government holding in the bank will come down to a tad over 82 per cent. Of the entire 4 crore shares on offer, 3.8 crore will be open to public, as the rest is reserved for its employees,” he said.

Currently, the government owns 100 per cent stake in the bank and is the only unlisted bank among 19 nationalised banks in the country.

The issue will close on December 15 for the qualified institutional buyers and on December 16 for all other bidders.

Of the net issue of 3.8 crore, up to 50 per cent is reserved for qualified institutional investors, of which 5 per cent is meant for mutual funds. Employees and retail investors will get a 5-per cent discount on the issue price, he said.

Founded way back in 1908 in Amritsar, the bank, nationalised in April 1980 under the second wave of bank nationalisation by the then Indira Gandhi Government.

As of the September quarter, PSB had a net profit of Rs. 276 crore, which stood at Rs. 501 crore for FY10, while its total business touched Rs. 88,000 crore by the end of the first half of this fiscal.

On the branch expansion plans, Anand said the bank will be opening 90 more branches during the remaining part of current fiscal.

As per the red herring prospectus, the bank has income tax disputes having financial implications of Rs. 254.90 crore and debt recovery proceeding having financial implication of Rs. 1,085.97 crore.