Central Bank to come out with IPO; issues 5 merchant bankers for the issue

Mumbai-based public sector bank Central Bank of India is coming out with an initial public offering of Rs. 1000 crores, expected by end-May 2007. The bank has finalized five merchant bankers for the issue. The bank has appointed IDBI Capital Markets, Kotak Securities, ICICI Securities, Citigroup Global Markets and Enam Financial as the lead managers to the issue.

The bank has received all regulatory clearances for converting about 71% of its large equity base into preference shares. The proposal for conversion of shares, which was stuck at the Reserve Bank of India (RBI), was recently cleared by the government. The bank is negotiating with the government for the coupon rate on the preference shares. The government wants a floating coupon rate of 100 basis points above the RBI’s repo rate, which is currently at 7.75%.

Of the Rs. 1124.14 crores equity capital, Rs. 800 crores would be converted into preference shares. The conversion will lower the bank’s paid-up equity capital to Rs. 324.14 crores. Central Bank, which had planned to get listed in the fourth quarter of 2006-07, as on December 31, 2006, had a total business of Rs. 121,301 crores, comprising deposits of Rs. 74,974 crores and advances of Rs. 46,327 crores.

Read the article in Business Standard.

IDBI Bank plans Rs. 1000-crore private equity fund

IDBI Bank is planning to float a private equity fund. The size of the fund will be Rs. 1000 crores and will invest in mid-sized companies, particularly those in the power sector.

The capital markets division of IDBI, IDBI Capital Markets, already has a Rs. 50-crore private equity fund rolling, raised from internal accruals. It made a Rs. 10 crore-investment to pick up about 5% stake in Coimbatore-based textiles company Vijayeshwari Textiles.

Read the articles from The Economic Times, The Financial Express and Zee News.