South Indian Bank plans to raise Rs 1,000 crore via QIP

The South Indian Bank Ltd. | Bank - Private | BFSI | BSE: 532218 | NSE: SOUTHBANK

09 Jun 2011 Evaluate

Kerela based South Indian Bank is planning to raise Rs 1,000 crore via QIP, which will entail issue of 40 crore new shares. The bank has been approached by eight merchant bankers and about four of them have been finalized while the presentations are still on. Bankers including JM Financials, SBI Caps, Kotak Investment Banking, Emkay, ICICI Sec, Enam are in negotiations with South Indian Bank.

The fund raising may happen in the range of Rs 30-33 per share which will lead to a equity dilution of about 35%. The proposed fund raising can take care of the bank's credit need for next three years. The bank’s board seek shareholder's approval for the fund raising exercise on July 15 and the QIP is expected to be concluded by September end.

Besides, South Indian Bank, has clocked total business worth Rs 50,560 crore in 2010-11, exceeding the target of 48,000 crore set for the year. The Bank expanded its branch network to 641 during the year and plans to open another 59 branches in the current fiscal.

Fiscal 2010-11 was a successful year for the bank as the deposits had grown by 29.08 percent and advances by 28.92 percent. In the last two years the bank’s business has doubled and as a part of bank’s “Vision 2013” growth plan, SIB envisages total business of Rs 75,000 crore, a branch network of 750, a total of 750 ATM Centres and an employee headcount of 7,500 in the next two years.