Post IPO CAR will be at 19.5% Vs 9.39% now: Nasser Munjee

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Development Credit Bank, DCB, which has come up with an IPO starting September 29 to garner Rs 157 crore - Rs 186 crore at the two ends of the price band at Rs 22 - Rs 26. Bank Chairman Nasser Munjee told Moneycontrol that the banks CAR post IPO would shoot to 19.5% from the current 9.39%. This, he averred, will help the bank's growth plans.

 

Moneycontrol.com spoke to Mr Munjee and his team on the sidelines of a press conference that announced the launch of DCB's maiden IPO issue that will close on October 6.

 

Out of the net IPO issue of 7.15 crore shares, 25,02,500 shares have been reserved for eligible employees and the rest 6.89 crore shares will be the net issue to the public.

 

The issue will help the bank strengthen its capital base and also help it meet capital adequacy ratio, CAR, required by Basel II and recommended by the Reserve Bank of India, RBI. Mr Munjee told exclusively to moneycontrol that after the IPO DCB's CAR will shoot up to 19.5% against the current 9.39%, which is very close to the CAR norm stipulated by the Indian banking regulator, RBI.

 

Apart from Mr Munjee, Pravin Batra, Executive VP, Corporate & Business Banking group, Adil Kasad, Executive Vice President & CFO and Sultan Allana, Director, Agha Khan Fund for Economic Development, AKFED spoke exclusively to moneycontrol on a range of issue including the interest rate scenario, RBI's timeline for reduction of AKFED's (promoters) stake to or below 10% by March 2007, and murmurs of unhappiness coming from private equity investors HDFC Ltd, Khattar Holdings Pte. Ltd, and Amtel Finance Ltd., who bought 4.67% stake each in DCB at Rs 45 per share, over pricing the IPO band between Rs 22 - Rs 26.

 

Excerpts from the exclusive interview with the DCB management.

 

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