Indian Bank said on Saturday that its Rs 1,500 crore Follow on Public Offer (FPO) is expected to hit the market by end of August or September as it has all the necessary clearances in hand to launch the issue.
“We expect the FPO will come out either in August end or September,” bank’s Executive Director, Mr Rajeev Rishi, told reporters here today.
Indian Bank is expecting to raise Rs 1,500 crore from public by diluting 10 per cent of the government’s stake in the bank, though pricing of the issue has not been decided yet. The stake of the government will reduce to 70 per cent post the FPO launch, he said.
The Chennai-based bank has already hired lead bank managers led by SBI to launch the issue, said Mr Rishi, while adding, the bank has already got approval from market regulator Sebi and RBI in this regard.
Asked about the impact of raising of saving interest from 3.5 per cent to 4 per cent, Rishi said there could be an impact of 12 basis points on the net interest margin (NIM) of the bank.
The bank’s NIM stood at 3.75 per cent, second highest after Punjab National Bank in 2010—11. NIM represents difference between yield on loans and the interest paid on deposits.
However, he said the bank’s profitability would not be impacted as it has already raised base rate by 50 basis points to 10 per cent.