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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http://www.idbipaisabuilder.in/Customer_Center/Form.aspx

 

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.

IDBI Bank updated ....

on 01.10.2010 the combined volume on IDBI bank crossed 97.15 lakh  on exchanges
BSE 24.17 lakh weighted avg price Rs157.62 closing at Rs 158.50 up Rs 6.1 or 4 pc
NSE 72.98 lakh weighted avg price Rs157.36 closing at Rs 158.45 up Rs 6.05 or 3.97 pc
many brokers and operators went short when first bump 2.5 up in price occured on mass buy at 11 am and were buying from market at flat price at 2.25 -2.5 pc up
http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500116


then came the next bump of 2 pc at 3 PM when more brokers / operators went short on share in F&O the market closed at 160 .45 today which is an uptick
http://www.nseindia.com/marketinfo/fo/foquote.jsp?key=FUTSTKIDBI28OCT2010--01OCT2010&symbol=IDBI&flag=1#

IDBI bank is the only PSU bank which is trading at nominal premia to declared book value and discount to actual book value considering the unrealised proft of Rs 79 per share in value of investments

In short if those who hold share in IDBI Bank understand the intrinsic value of the share and hold tight on it without fear of minor blip in the market price of share then the price shall move up and reach the intrinsic value
for latest updates on quarter / half year ended 30 september 2010
http://www.moneycontrol.com/video/news/idbi-bank-q2-net-profitat-rs-429-cr_495129.html

on 29.10.2010 the combined volume on IDBI bank crossed 97.15 lakh on exchanges
BSE 37.78 lakh W avg price Rs182.1 closing at Rs 180.65 up Rs 0.22 or 0.11 pc with high of 188.40
NSE 123.9 lakh W avg price Rs182.1 closing at Rs 179.90 down Rs 0.25 or 0.14 pc with high of 189.90
http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500116

IDBI Bank Ltd profit estimates 2010-11 vs actuals

As per Sec 211 of Income tax act Advance tax on the current income calculated in the manner laid down in section 209 shall be payable by On or before the 15th September--- Not less than forty-five per cent. of such advance tax, as reduced by the amount, if any, paid in the earlier instalment.
Durint the year the tax paid and profit for half year ended 30.09.10 were as follows
For Period H1 Sep Sep Q2 Sep Q1
------ended --2010 ---2010---- 2010
Profit BTax.... 974 ....645.... 329
Tax Paid .......263 .....184 ..... 79
Net PAT .......711...... 461.... 250
EPS ............7.25.......4.70... 2.55
During the Quarter the outstanding shares has increased to 98 crores from 72.9 crores due to infusion of capital by Government of India.
The First quarterly result were taken as published and the IDBI bank is likely to post PAT of Rs 711 crore for the half year ended 30.09.2010 after considering the tax @30% pa which represents 67.3 pc over last half year ended 30.09.2009
The Advance tax figure of 263 cr paid up to 15 Sep 2010 were considered from return by Income tax department
--------------------------------------------------------------
Actual performance reported as on 30 sep 2010
For Period H1 Sep Sep Q2 Sep Q1
----ended --2010 ---2010---- 2010
...............Rupees in crore.............
Turnover....  9824....5069 ...4755
Profit BTax..1857....1026......831
Provisions.....944.......442......502
Tax Paid .......234 .....155 .......79
Net PAT .......679...... 429.... 250
NPM in pc ....6.91..... 8.46... 5.26
EPS ..............6.93.....4.38... 2.55
================================
The growth in half year ended 30.09.2010 over half year ended 30.09.2009 in turnover is 15.5 percent and net PAT is 59.4 percent
The growth in trailing 12 Mths 30.09.2010 over full year ended 31.03.2010 turnover is 7.5 percent and net PAT and 24.63 percent

Total assets at Rs 236000 crore as on 30.09.2010
Provision at 74 percent of doubtful debts based on RBI norms and 44 percent on traditional basis.
Net Interest Margin above 2 percent during the quarter 30.09.2010 and shall continue so


NOW THE ADVANCE TAX ESTIMATE FOR 2010-11
(figures extrapolated using the advance tax paid and previous three years tax rate)
Advance tax paid Rs 263 crore is 45% advance tax / 40.5 % of estimated final tax.
The estimated final tax is Rs 600 crore for 2010-11.
Assuming a net tax rate of 28.5% on Book Profit and the trend in growth of income in case of IDBI Bank
the Estimated Profit before tax and Net Profit after Tax would be Rs 2275 crore and Rs 1675 crore respectively for 2010-11 over a Turnover of Rs 20730 crore
as against Profit before tax Rs 1044 crore and Net Profit after Tax Rs 1031 crore for 2009-10 over a Turnover of Rs 17563 crore
The EPS is expected to be 17.1 and at current market price of Rs 180 the share trades at a PE of 10.53 x as against 15 x for the industry

updated on 30.10.2010

2010VP07 IDBI Bank Ltd

BSE: 500116 | NSE: IDBI

	Market Cap 8,473.21 Cr EPS (TTM) 14.16 P/E 8.26 Book Value 102.71			CMP 116

IDBI Bank chairman and managing director Yogesh Agarwal expressed confidence that the bank will emerge as the fifth largest bank in the country by the year 2012.

The bank’s local branch, the 40th in the State, was formally inaugurated by TTD Executive Officer IYR Krishna Rao at Annamayya Circle here on Wednesday, in the presence of TUDA Chairman Ch.Bhaskar Reddy and proprietor of Mayura Hotel group S. Jayarama Chowdary.

Speaking on the occasion, Mr.Agarwal said that the branch would start functioning as a personal banking unit and shortly extend to Small and Medium Enterprises (SME) and agricultural business portfolios. He also said that the bank would expand its footprint to 20 new locations in the State by next year. The net profit for the quarter-ending December 31 stood at Rs.287 crore....

With the increase in CRR and the surplus liquidity once it is sucked out, interest rates are bound to firm up, in fact they have already started firming up especially on the corporate side. On the retail side, I suppose it will take a little longer but on the corporate side, I quite clearly see the firming up of deals.

On NIM, my target for the entire year was 1.2. For the nine-month period, we have already achieved 1.17 and in fact in the last quarter that the Q3 which you referred to as very strong result, my NIM for the quarter itself was 1.59. So I have no doubts that we will end the year with a much higher NIM than the target of 1.2.

credit growths, most of it takes place in the last quarter and this year is no exception in fact as end of December, IDBI`s credit growth year on year was already 21%. So we hope to end the year and in fact we are quite confident of meeting our internal targets which should definitely be upwards of 20%, year on year credit growth by the end of March. As I said we are already at 21% end of December.

Capital adequacy is definitely an issue which we have taken up with the government and we need Tier 1 from the government which is not likely to come up this year so my Tier 1 as you said is at 7%. We are now raising some money which we can wherever there is headroom, we will be raising it and my capital adequacy which is around 11.5% I think will end the year around that level only.
This fiscal we are not expecting anything from the government because the government has told us that they will not be able to provide us with any capital this year but they have promised me the capital which I have asked for in the next fiscal.

Well NPAs if you say as were expected on the corporate side there is not much pressure accretion of NPAs but the areas of concern is around the SMEs this time and in SMEs we have seen some accretion of NPAs during the quarter especially in SMEs which are heavily dependent on exports. So I suppose this is in line with the market trend with the worldwide trend and SMEs which are dependent on exports are definitely facing a bit of stress but I suppose at once the domestic and the world economy picks up these SMEs will come back to standard category. ..

On acquisitions, which is always a hot topic with journalists, I have always been saying that we are looking at a couple of private sector banks for acquisition. Specific names I have always maintained that I will not be able to discuss till the deal is finalised, it is neither fair to us and neither fair to the acquired bank to reveal the names till the deal is finalised, just we are talking to them.

Well, look at my past history of IDBI, the two banks that we have acquired so far have all been in the private sector and in the market also, we have positioned IDBI Bank as a government-owned bank but run on the private sector lines, so the private sector banks are a better fit for IDBI Bank than the public sector bank, that is No 1 and the No 2 reason is that it is very difficult to acquire a bank in the public sector for reasons, which are very well known, nothing much is happening there and a lot of talk is happening but nothing is really moving forward. So in terms of really achieving any focussed results, it is much better to concentrate your energies on the private sector banks rather than on the public sector banks, I hope you agree with that.


The funds will come. I cannot reveal, let`s first the acquisition happen and when the acquisition happens, the funds will be there.