The Telegraph
Since 1st March, 1999
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UTI Bank hunt for ally leads to 6 investors

Calcutta, Oct. 29: UTI Bank has identified six investors both in India and abroad who are keen to invest in the bank. The bank wants to raise Rs 150-200 crore capital through private placement by December this year.

Chairman and managing director P. J. Nayak said, “We had appointed SSB, an investment banker, to scout for partners. They have identified six investors with whom we have entered into a confidentiality agreement. Some of them are foreign institutional investors. There are private equity funds also. They may come as long-term investors as well as strategic investors.”

Last year, UTI Bank had offered a 26 per cent of its stake to Commonwealth Development Corporation. The equity offering to CDC was executed through two private equity funds — South Asia Regional Fund and CDC Financial Services.

At present, the bank wants to offer 20 per cent of its paid-up equity of Rs 191.88 crore, which is Rs 38.37 crore. “We will ask for a premium on this. We have not yet worked out the premium amount.” The bank had offloaded 26 per cent stake to CDC at a premium of Rs 24.

Following the private placement, UTI’s stake in the bank will come down from 41.71 per cent to 37 per cent.

Mopping up of fresh capital is required for the bank, which wants to enhance its capital adequacy ratio from the present level of 10.65 per cent to at least 12 per cent.

Having cherry picked and acquired corporate and retail assets of Rs 1,200 crore from some of the premier financial institutions and non-banking financial institutions last fiscal, the bank is on the lookout for good corporate assets ranging between Rs 100-200 crore and retail assets in the region of Rs 10-30 crore.

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