Punjab & Sind Bank eyes over Rs5 billion via IPO

State-run Punjab and Sind Bank plans to raise more than Rs5 billion through its initial public offer, a top official said on Monday.                                         

The bank, which has filed its draft red herring prospectus with Securities Exchange Board of India (SEBI) on Friday, is the only state-owned bank in the country which is not listed on the stock exchanges.                                         
 

"We intend to launch the issue in end of November or early December, depending upon the clearance from SEBI," executive director PK Anand told Reuters over the telephone.                   
 

The bank will issue 40 million shares with face value of Rs10 each, Anand said.                                           

"The funds will be raised for our credit expansion," he said.                                            

The bank's current equity capital is Rs1.83 billion and another Rs2 billion is held as perpetual non-cumulative preference shares, which classifies as Tier I capital.                                        
 

The bank has also asked the government for Rs7 billion of capital infusion, Anand said.                                           
 

The federal government has been infusing capital into some banks to help them shore up their capital adequacy ratio under its recapitalisation plan.