Central Bank plan to tap the Capital Markets:plans an IPO of 1000 cr.

Central Bank of India, one of the few government-controlled banks yet to tap the capital market, has filed its draft prospectus for an initial public offering with the capital markets regulator Sebi to raise close to Rs 1,000 crore.
The bank, which is planning to launch a public offering of eight crore shares, is likely to price its issue at close to Rs 110 per share. Central Bank, like other banks in the country, needs funds to bolster its capital base to feed rising demand in an economy which has recorded an average growth of 8% during the last four years.
The public offer will help the bank bolster its capital adequacy ratio now at 10.4%. The beefing up of its capital base will also aid the bank in fulfiling regulatory norms for banks with overseas operations.

Source: Economic Times

Central Bank to roll out IPO in June

The Central bank of India is expecting an approval for an IPO from the Securities and Exchange Board of India(SEBI) in June. The capital realized by the bank would be used to amend the basel-2 Capital adequacy ratio (CAR) as directed by the Reserve Bank of India(RBI).The CAR is expected to rise to 12 per cent from the current levels of 10.40 percent after the issue.

The management also plans to expand the bank internally, upgrade it technologically and strengthen the Human resource department. The size of the IPO is expected to be somewhere around Rs300 crore. The bank is also thinking on capital expansion as a means of capital restructuring and diversifying it services.

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.