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J&K Bank plans to sell stocks to raise funds

New Delhi, Aug. 14: Jammu and Kashmir Bank Ltd has planned to offload 10 per cent equity to private investors for funding its expansion programme, chairman and managing director M. Y. Khan has said.

The state-run bank, headquartered in the insurgency-prone state of Jammu and Kashmir, plans to shed the equity in favour of foreign banks within the year. The board is expected to clear the proposal at its meeting scheduled on August 16.

“The shares should command a good premium,” Khan said. The bank has a paid-up equity capital of Rs 48.20 crore where the state government holds around 53 per cent.

Jammu and Kashmir Bank’s shares are listed on the Bombay Stock Exchange and currently trade at around Rs 210.

Analysts said the private placement is likely to raise between Rs 110-145 crore. “We are talking to some people and hope the placement will be highly successful,” Khan added.

He said the bank would invest Rs 40 crore on ATMs, new domestic and offshore branches and in interlinking its branches. It is planning to increase the number of branches to 500 units from the current 459 within the next two years and increase the number of ATMs to 150 by the end of this fiscal.

The Reserve Bank has given an in-principle approval to set up an offshore branch in Dubai. The bank plans to open branches in London and Malaysia.

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