Indian Bank has decided to defer its follow on public offer (FPO), to a time 'when the market conditions are better'.
Indian Bank would need additional capital of Rs 15,000 crore, by March 2018, to meet the Basel-III norms of capital adequacy. But the bank's Chairman and Managing Director, Mr T.M. Bhasin, sees no problem in securing this additional capital.
Speaking at a press conference here on Friday, Mr Bhasin said the bank would get Rs 10,000 crore from internal accruals and the rest from the market.
The bank had planned a follow-on public offer, in which process it would dilute ten per cent of Government of India's stake. The Government currently holds 80 per cent in the bank. Indian Bank had wanted to raise roughly Rs 1,500 crore through the FPO.
But Mr Bhasin said the bank had deferred its FPO idea to a later date, when the market conditions would be better. He said he hoped for better valuations.
It was said at the press conference that the bank has scope to raise Rs 7,500 crore of tier-II capital. But the bank is in no hurry to raise resources at present because its capital adequacy ratio stands at a comfortable 13.47 per cent.