United Bank files IPO papers with SEBI

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Public sector undertaking, United Bank of India is coming out with an initial public offering (IPO) of 5 crore equity shares of Rs 10 each. It has filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India. The bank had received the government's approval for an initial public offering on December 4, 2009.

The issue comprises of reservation of 25 lakh equity shares for eligible employees and the rest for the public. The net issue will constitute 15.01% of the post issue paid up capital of the bank.

With the Government's approval, United Bank is geared up to come out with its maiden public issue by January 2010, Chairman and Managing Director, Mr S C Gupta told a press conference on Dec 4.

"We plan to issue five crore shares at a face value of Rs 10 each and at a premium of about Rs 70-80 per share. We are hopeful of raising Rs 350-400 crore. The governments' stake, which stands at 100%, will come down to about 84% after the IPO," Mr Gupta said.

United Bank aims to achieve business of Rs 1,20,000 crore by the end of March 2010, and Rs 2,00,000 crore by March 2012, he added.

The objects of the issue are to augment capital base to meet the future capital requirements and for meeting the expenses of the issue.

As of December 18, 2009, the bank had 1,484 branches, 265 ATMs, 28 regional offices and 11 extension counters. It is in the process of opening a representative office in Dhaka, Bangladesh.

In fiscal 2009, it had reported a net profit of Rs 358.55 crore and has net assets of Rs 61,500.78 crore. As of September 30, 2009, it has posted a net profit of Rs 231.10 crore and had net assets of Rs 71,952.25 crore.

The book running lead managers to the issue are SBI Capital Markets Ltd, Edelweiss Capital Ltd and Enam Securities Pvt Ltd. Link Intime India Private Limited is the registrar.