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Tuesday, February 21, 2012

South Indian Bank plans to raise Rs 1,000-cr capital this fiscal

South Indian Bank is all set to revive its capital raising plan. The Thrissur-headquartered bank had in July-August 2011 proposed to raise Rs 1,000-crore of capital by taking the QIP (Qualified Institutional Placement) route.

The plan was subsequently put on hold as the market conditions were not conducive.

It is now learnt that this proposal is being revived and the bank is planning to complete the process before the end of this fiscal.

At present, FII (foreign institutional investor) and NRI holdings in SIB are more than 48 per cent of the bank's capital, but slightly below the permissible 49 per cent limit.

It is learnt that the bank has appointed JP Morgan, JM Financial, SBI Capital Markets and Enam Securities as merchant bankers to its proposed capital issue.

The bank went for a QIP in 2007, when its business was around Rs 14,000 crore. The issue size then was Rs 326 crore.

Five years later in 2012, it has decided to raise capital to take care of its future requirement.

The issue is expected to improve the bank's capital adequacy ratio from around 14 per cent at present to 17-18 per cent, take care of its branch expansion plans and sustain its growth momentum.


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