Sunday, December 12, 2010

IPO Punjab & Sind Bank December 2010

The IPO of Punjab & Sind Bank (PSB) opened for subscription on 13th December 2010 in the price band of Rs 113 to Rs 120 per share. The issue will close on 16th December 2010

 

The bank will to go public to raise Rs 470 crore by diluting 18% of government holding. After the listing, government holding in the bank will come down to 82%.

 

IPO of Punjab & Sind Bank (PSB) provides an opportunity to invest in India's one of the small sized bank with over 100 years of operations. The bank plans to establish its pan India presence by opening new branches throughout the country to increase its customer base and business. The bank has maintained capital adequacy ratio (CAR) at 13.04% with the tier-I capital at 7.9% and the tier-II capital at 5.1% as on September 2010. The proposed expansion of branch network is expected to help the bank to further improve CASA (Current And Saving Account) ratio. The bank has plans to open specialized industrial finance branches and aims at expanding its credit portfolio, by growing its corporate & retail loan segment. The bank has been able to reduce its net NPA (Non Performing Assets) ratio significantly from 8.11% in FY'05 to 0.36% in FY'10. Going forward, the bank is likely to maintain NPA ratios around this level. From a total of 17 branches on the CBS (Core Banking Solutions) platform, the bank seeks to bring around 500 branches on the CBS platform by Nov 2012 enabling it to have incremental CASA growth and profitability in future.

 

At the given price band, the issue is attractively valued and investors with long term investment horizon can subscribe the issue.  

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