Chennai-headquartered Indian Bank, which is celebrating its 100 years of operations, is entering the capital market with an IPO of 85,950,000 equity shares of Rs 10 each for cash at a premium to be decided through 100% book-building process.

Moneycontrol conducted a poll on market experts to check whether to apply for the public issue or not. Experts said apply.

The price band for putting in bids for the IPO, which opens for subscription on February 5, 2007 and closes on February 9, 2007, has been fixed between Rs 77 and Rs 91 per share.

The offer constitutes 20% of the post issue fully diluted paid up equity capital of the bank. Post-IPO, Government of India will hold 80% of the public sector bank’s equity share capital. 

The bank has reserved 10% of the issue, i.e., 8,595,000 equity shares for allocation to eligible employees and the balance 77,355,000 equity shares constitute the net offer to the public. Of the net offer to public, 60% shall be allotted to qualified institutional buyers. Within the QIB portion 5% will be available for allocation to mutual funds. Further, 10% will be available for allocation to non-institutional bidders and the balance 30% will be available for allocation to the retail investors on a proportionate basis.

The bank is tapping the market to augment its capital base to meet future capital requirements arising out of implementation of the Basel II standards and also to grow its assets (in sync with the growth of the Indian economy), primarily loan and investment portfolio. 

According to KC Chakrabarty, Indian Bank chairman & MD, “Our mission statement is to be the common man’s bank, as unveiled by the President of India on September 4, 2006, we seek to provide a range of financial products and services to all our customers under one roof.’’

While providing the financial products and services to the retail and corporate customers, the bank maintained its focus on addressing the needs of agricultural customers and offer specialised products and services that cater to the agricultural and rural sectors.

The bank offers direct financing to farmers for production and investment, as well as indirect financing for infrastructure development and credit to suppliers of agricultural inputs.  It has established rural Internet Kiosk Centers in 12 locations to facilitate banking information in rural areas.

As a part of its commitments towards social banking and facilitating community development, the Bank has played an active role in providing microfinance through Self Help Groups (SHGs). It is one of the pioneers in the SHG movement.

Indian Bank has network of 1,408 branches spread across 26 states and 3 union territories. It also has a branch in Singapore and another in Colombo, Sri Lanka. As on September 30, 2006 the bank had over 18.1 million customers.

All domestic branches of the bank are computerized. Over 800 branches and 80 extension counters (covering about 84% of the bank’s business) are functioning on the core banking platform, thereby providing “any time, any where” banking to customers through multiple delivery channels.

The book running lead managers to the Issue are SBI Capital Markets , Enam Financial Consultants , ICICI Securities and Kotak Mahindra Capital Company.

The Issue will be listed on the Bombay Stock Exchange and the National Stock Exchange.