UTI Bank to raise $250 million via GDRs
By Our Banking Bureau | 18 Jan 2005
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Mumbai: The UTI Bank board today approved the bank's plan of raising around $200-250 million through an issue of global depository receipts (GDRs) before March 2005.The proposed capital raising will lead to 20 per cent dilution in shareholding. After the capital infusion, the holding of the Specified Undertaking of the UTI (UTI-I) in the bank will come down from 33.32 per cent to around 27 per cent, LIC's holding will slip from 13 per cent to about 11.5 per cent and GIC's holding from 3 per cent to around 2.5 per cent.
Post issue, the foreign holding in the bank would go up from the existing 32 per cent to around 43 per cent, said UTI Bank chairman and managing director PJ Nayak.
The board approved a proposal to raise capital, in one or more tranches, by way of an international offering, Nayak said. The maximum number of ordinary shares to be issued shall not exceed 46.56 million, he added.
The money would support the bank's growth for the next three years, Nayak said. A fresh infusion of capital will enable the bank boost its capital adequacy ratio from 9.38 per cent to above 11 per cent.
"We would list on the London Stock Exchange (LSE) and also get a Section 144 (A) filing done with the Securities and Exchange Commission in the US which will give us access to US institutional investors," said Nayak. "A GDR issue will enable the bank widen its investor base," he added.
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