Second public offer from OBC to open on Apr 25
New Delhi: The Oriental Bank of Commerce will approach the market with its second public offer on April 25. The offer price will be decided through a book-building process
and the bank will announce a price band for the issue two days before the issue opens for subscription.

OBC is likely to offer the shares at a discount, as has been the trend among PSU banks like PNB, Allahabad Bank and Dena Bank in their follow-up public offers. After the public offer, the government's shareholding in the Delhi-based bank will come down to 51.2 per cent from 66 per cent.

The public offer will raise the bank's capital adequacy ratio, which was eroded after it acquired the ailing Global Trust Bank along with its bad assets worth Rs1,400 crore.

The bank has appointed five merchant bankers - DSP Merril Lynch, Kotak Securities, Citigroup, I-Sec and Bajaj Capital - to manage the public offer.

OBC was the first nationalised bank to tap the capital market in 1994 and raised Rs387.24 crore by issuing equity shares having face value of Rs10 each at a premium of Rs50.
Back to News Review index page  

SBI to provide credit for jatropha cultivation
Chennai: The State Bank of India (SBI) and D1 Mohan Bio Oils Ltd have entered into an agreement to promote contract farming of jatropha for bio-diesel production.

SBI's Chennai Local Head Office and D1 Mohan Bio Oils, a joint venture between Mohan Breweries and D1 Oils, UK, entered into an agreement under which the bank will give Rs130 crore credit to farmers to bring one lakh acres under jatropha cultivation this year.
D1 Mohan Bio Oils said that these one-lakh acres will be spread across the State and will include wastelands and irrigated lands.

The credit support will cover 90 per cent of the cost of cultivation and the farmers will have an assured market for the crop.

Mohan Bio Oils will supply seedlings, chemical inputs and cultivation technology to the farmers. It would buyback the jatropha seeds to process them to produce bio-diesel that can be used as an automobile fuel.

It will set up an Rs15-crore processing plant near Chennai to produce about 8,000 tonnes of bio-diesel from 25,000 tonnes of seeds, annually. This will be a pilot plant that will be followed up with one-lakh tonne capacity plants in each district in Tamil Nadu once the availability of the oilseed increases, company officials said.

According to SBI officials, New India Assurance Co insures the crop loan.

The total cost of cultivation comes to about Rs10,760 an acre in wastelands and Rs19,560 an acre under irrigated conditions. The crop loan would cover 90 per cent of the cost. The loan would be disbursed in four instalments a year. The farmer can look forward to an income of at least Rs40,000 a hectare. It is a perennial crop that will yield seeds for 30 years.

Though the Centre is yet to come out with marketing guidelines for the bio-fuel, there is a strong demand for the product in the domestic and international markets.
Back to News Review index page  

SIDBI to relaunch its capital gains bonds
Mumbai: The Small Industries Development Bank of India (SIDBI) is relaunching its on-tap capital gains bonds issue under Section 54 EC of Income-Tax Act, 1961 by way of private placement on Monday.

The bond has been assigned a rating of `AAA' by Care. Instruments carrying this rating are considered to be carrying negligible investment risk, said a press release.
Back to News Review index page  

Exim Bank credit lines to help fund overseas ventures
Coimbatore: Exim Bank of India will extend two new lines of credit to help Indian companies seeking investments in overseas ventures, including project takeovers.

The credit lines, of $25 million each, will be put into place, with the Syrian Government and with Tajikistan, in the CIS, over the next few months. While the proposed line of credit for Syria will be initialled within the next one month, the one for Tajikistan will be activated over the next two months or so, Exim Bank officials have said.

While these credit lines are essentially to facilitate financing Indian companies' overseas operations, including export of goods and services, these could also buttress their efforts in getting project financing, including acquisitions or seeking joint venture businesses in these countries.

Exim Bank, as part of its project financing for export manufacturing companies, is already involved in providing funds to some domestic companies for their proposals to takeover overseas ventures such as auto components, electrical equipment or specialty chemicals manufacturing.

Exim Bank officials have also sounded the domestic textile industry on exploring the scope for acquiring overseas apparel brands. According to officials the time was opportune for Indian textile firms to think seriously of acquiring clothing brands, which will enable them to achieve entry-level gains in global retailing.
Back to News Review index page