Pref issue: Central Bank to allot more shares to Centre

Central Bank of India has hiked the number of shares to be allotted to the GoI in the preferential allotment to be made for raising up to Rs 1,000 crore.

The bank has cut the number of shares to be allotted to the Life Insurance Corporation of India under the preferential share proposal.

Modifying the earlier notification, Central Bank said that the preferential allotment committee of the board of directors on March 24 approved that the total number of equity shares to be offered to the Government of India and Life Insurance Corporation of India on preferential basis is 94,688,003 equity shares (same as proposed earlier.

The allotment price would be Rs 105.61 (including a premium of Rs 95.61) per equity share aggregating up to Rs 1000 crore (including premium). Out of the 94,688,003 equity shares, GoI will be offered 64,009,090 equity shares and remaining 30,678,913 shares will be offered to LIC.

According to the earlier proposal that the board of directors approved on February 29 for raising up to Rs 1,000 crore (including premium), the share of GoI was up to 62,357,687 equity shares and that of LIC was up to 32,330,316 shares.

There is no change in the premium to be charged and the total number of shares to be allotted on preferential basis to both GoI and LIC. The change has been made only in the proportionate allotment.

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IOB to set up 75 ATMs in I-T Dept premises

Indian Overseas Bank will set up 75 ATMs in the premises of Income-Tax Department in different locations. These ATMs will come up in the Ayakar Seva Kendras (ASKs) of Income-Tax Department.

Speaking on the sidelines of the inauguration of the ASK in the premises of Income-Tax Department in Mangalore on Monday, Mr M. Narendra, Chairman and Managing Director of Indian Overseas Bank (IOB), said that the bank will set up 75 ATMs in various ASKs in the country in the next few months.

The first such ATM was inaugurated in Mangalore on Monday. He said the bank had made a request to the Central Board of Direct Taxes to set up ATMs in the premises of income-tax department in the country.

The department has made available sites for setting up of IOB ATMs in 15 locations in the country. As and when the department makes available sites, the bank will set up its ATMs in other locations also.

The bank hopes to complete the installation of ATMs in the remaining locations in the next three to four months, he said.

vinayakaj@thehindu.co.in

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Warburg Pincus sheds stake in Kotak Mahindra Bank

Private equity investor Warburg Pincus LLC has sold 3.6 per cent of its remaining stake in Kotak Mahindra Bank. The exit took place through bulk deals on the exchanges. Reports say that the investor sold shares for Rs 1,400 crore through this deal.

The deal took place through the PE investor's entities — Melany Holdings and Madison Holdings. According to the data filed on the BSE, Warburg Pincus' entities sold the remaining 26.5 million of their shares of Kotak Mahindra Bank at Rs 530 a share.

Shares of Kotak Mahindra Bank closed at Rs 530, up 1.18 per cent on the BSE.

Major buyers were — The Genesis Group Trust For Employee Benefit Plan which bought around 6.6 million shares and The Genesis Emerging Markets Investment Company which bought 7.07 million shares.

In February, the PE investor part-exited Kotak Mahindra Bank by selling 17.5 million shares (around 2.37 per cent stake), for about Rs 850 crore. At the end of December, Warburg Pincus held 44 million shares (5.98 per cent stake) in the bank.

The PE firm first invested in the bank in 2004. It initially held 2.24 per cent stake in the bank which it bought for around Rs 75 crore. In 2005, it increased its stake to about 10 per cent in Kotak Mahindra Bank.

In March 2011, Warburg Pincus LLC held around 9.28 per cent stake in the bank. The private equity investor then sold a stake of about 2.28 per cent in the bank in June-July period. In October last year, the investor again sold about one per cent stake in the bank.

Warburg Pincus LLC exited several of its investments in DB Corp, Max Healthcare, Vaibhav Gems, etc, in 2011.

priya.s@thehindu.co.in

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IDBI Bank to get Rs 810-cr capital via pref issue

State-owned IDBI Bank today said the Government has decided to infuse Rs 810 crore in the bank by way of preferential allotment of shares.

The Government of India (GoI), in a letter dated March 23, 2012, had decided to infuse capital funds to the tune of Rs 810 crore by way of preferential allotment of equity, IDBI Bank said in filing on the BSE.

Last month, the bank decided to sell 5 per cent stake to Life Insurance Corporation (LIC) on preferential basis.

LIC has in-principle given approval for subscribing a maximum of up to 5 per cent of the pre-issue paid-up equity capital of the bank, it had said.

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Interest rates on small savings schemes may go up by 0.25%

The government is likely to hike the interest rates on deposit schemes offered by post offices, like savings account, Monthly Income Scheme (MIS), Public Provident Fund (PPF), etc by about 0.25 per cent from April 1.

A circular on revised interest rate on small savings scheme will be issued by March 28, official sources said, adding that there could be a 0.25 basis points hike in the rates.

"We are in the process of calculating the rates. The new rates will be applicable from April 1," they added.

The government had in December, 2011 hiked interest rates on post office savings accounts (POSA) to 4 per cent, from 3.5 per cent. Similarly, the interest rates on the MIS and PPF was fixed at 8.2 per cent and 8.6 per cent respectively.

The decision to hike interest rates in December was in line with the recommendations of the Shyamala Gopinath Committee which had suggested linking of interest rates on small savings with that of the market. The panel had also suggested that the interest rates on small savings schemes should be revised annually.

The revision in the interest rates is aimed at maintaining the attractiveness of the small savings schemes vis-a-vis fixed deposit schemes operated by banks.

The government, as part of economic liberalisation process, had freed the interest rates on banks deposits giving freedom to lenders to fix rates depending upon the asset-liability position, but continued to fix rates for small savings schemes.

Pursuant to the recommendations of the Gopinath Committee, the government had introduced the National Savings Scheme (NSC) with a 10-year maturity to attract long-term funds.

The annual investment ceiling in PPF savings was increased to Rs 1 lakh from Rs 70,000.

Source: EconomicTimes

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