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IOB prices IPO at par

Our Bureau

MUMBAI, Sept. 13

THE current market conditions have nothing to do with Indian Overseas Bank (IOB) deciding to price its IPO at par, according to Mr S. V. Shastri, Chairman and Managing Director.

Addressing a press conference here on Wednesday, Mr. Shastri said ``our intention is to reward the investors.''

While banks such as Punjab National Bank, Canara Bank and Andhra Bank have all deferred their IPOs which were slated for this fiscal, IOB is entering the market with a maiden issue of 11,12,00,000 equity shares of Rs 10 each to raise capital of Rs 111.20 crore.

Post-issue the Government's stake in the bank will come down to 75 per cent. ``Through this issue, the CRAR will rise from the present level of 9.15 to 9.50,'' said Mr S. C. Gupta, Executive Director, IOB.

The bank is considering coming out with a `tier two' issue by the end of this fiscal. The bank's capital currently stands at Rs 333.60 crore.

The bank has targeted a gross profit of Rs 250 crore for the year 2000-2001, as against Rs 188.23 crore recorded in 1999-2000.

It plans to commence Internet banking by December and Tata Consultancy Services has drawn up a strategic paper for IOB's e-commerce initiatives. As on date, 620 of 1,400 of its branches were computerised. By 2003, the bank plans to computerise 1,000 bran ches, said Mr Shastri.

The bank's bullion business has posted a turnover of Rs 8,945 crore. For its gold deposit scheme, which commenced in March 2000, the bank is targeting temples and trusts.

Asked about the bank's plans to enter the insurance business, Mr. Shastri said the bank would initially go in for distribution of insurance products.

Pic.: Mr S. V. Shastri, CMD, IOB, at a press conference to announce the bank's forthcoming IPO in Mumbai on Wednesday.

Pic. credit: Paul Noronha