IDBI Bank may go for follow-on public offer in 12 to 15 months

The public sector IDBI Bank may go for follow-on public offer (FPO), rights issue or qualified institutional placement in the next 12 to 15 months, a top bank official said here Saturday.

The government owns 65 percent stake, after it infused Rs.3,000 crore, in the bank with the share capital of Rs 980 crore with a market capitalisation of Rs18000 crore . It allows us to raise money by way of either right issue, qualified institutional placement, preferential placements or FPO ," the bank's chairman and managing director R.M. Malla told reporters on the sidelines of a press meet.

Noting this would help the bank get more capital, he maintained that the bank would take such a decision at appropriate time.

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At present, the capital adequacy ratio of the bank is 13.6 percent.

the bank this fiscal (2010-11) has raised Rs.300 crore as tier I capital. "We would raise Rs.1,500 crore as tier II capital in this fiscal," he said.

The bank is targeting 22-25 percent credit and deposit growth in the current fiscal. The total business size of the bank for the half year ended 30 september was Rs.328,000 crore

To woo customers and increase the proportion of the current and savings accounts (CASA), the bank has waived off all charges relating to CASA accounts recently. The CASA of the bank is at 15 percent of the total deposits which it aim to raise to 25 percent in three years time.

The bank recently borrowed $350 million from foreign markets. It would mobilise $1 billion in the next 12 months from foreign markets, Malla said.

At present, the bank only has one international branch at Dubai. "We plan to open representative branches in Singapore and China," he said.

It also plans to add 280 more branches across the country this fiscal to the existing 730 branches and another 400-500 ATMs, he said.