United Bank makes its debut with 4% premium

19 Mar 2010, 0111 hrs IST,
SourceET Bureau


MUMBAI: Shares of state-owned United Bank makes its debut with 4% premium

(UBI) listed on Thursday on local stock exchanges 

at a modest premium to its issue price,
underscoring investor sensitivity to valuations.

The stock listed at Rs 77, but surrendered most of its gains
to close at Rs 68.10, up 4.2% over its issue price of Rs 66.
Dealers tracking the stock said it was fairly valued at the issue price.
The counter attracted combined volumes of 8.3 crore shares on BSE
and NSE, which account for 26% of the bank’s post-IPO equity.

Intra-day, players were active in the stock, which was also reflected
in low delivery-based volumes in the counter.
Only 19% of the total traded quantity resulted in actual
delivery on BSE on Thursday.

The bank reported a net interest margin of 2.07% for the
December quarter, which is low compared to its peers with a
similar current account savings account ratio of 34%.
“Since we are repricing some of incremental SMEs, mid-corporate
loans at higher yields, I expect NIM to improve,” said Bhaskar Sen,
CMD of United Bank of India.

“The stock looks adequately valued at the current level.
Any further upside would depend on the management’s
growth strategy and also on fundamental factors like RoE and RoA,”
said an analyst with a Mumbai-based broking firm.

UBI had offered five crore shares in the price band of Rs 60-66 per
share to raise Rs 330 crore from the public. It had also offered a 5% discount
to retail subscribers. The issue received the overall subscription of 33.4 times,
while the retail portion was subscribed 8.4 times.

The bank plans to use the proceeds to enhance its capital base
so that it would be able meet its future capital requirements.

UBI IPO subscribed 33.38 times

 


The initial public offering of a government owned United Bank of India, which closed today, has received overwhelming response from all kinds of investors. 

It has subscribed 33.38 times.

The reserved portion of qualified institutional, retail and non-institutional investors got subscribed 47.08 times, 9.8 times and 39.15 times, respectively. 

India's largest bank SBI has put in bid for Rs 300 crore worth of shares and Halbis bid for Rs 625 crore. LIC has bid for Rs 209 crore worth of shares,

The 5 crore equity shares IPO opened for subscription on February 23 and the price will be determined through a 100% book building process. 

The price band is at Rs 60-66 per share and the issue is available at a 5% discount to retail investors. 

It comprises a net issue of 4.75 crore equity shares to the public and a reservation of 25 lakh equity shares for subscription by eligible employees. 

The issue shall constitute 15.80% of the post issue paid-up capital and the net issue shall constitute 15.01% of the post-issue capital of the bank.

United Bank gets govt nod for IPO

 Kolkata December 4, 2009,

Public sector lender United Bank of India (UBI) today
said it has got the government approval to float an 
initial public offer (IPO) which is expected to hit
the capital markets latest by the first week of February


UBI Chairman and Managing Director S C Gupta told reporters
 here today that the bank has been permitted to issue 5 crore 
equity shares at a face value of Rs 10 to the public at a 
reasonable premium.

Post-IPO, the government holding in the bank would come down
by 16 per cent from the present 100 per cent.

The Centre is also understood to have decided to introduce
the SBI Amendment Bill in the current session of Parliament.
 The Bill seeks to dilute its stakes in the nation's largest
 bank to 51 per cent from the current 59.41 per cent.
The amendment will enable SBI to come up with a follow-on public offer.

SBI Chief Financial Officer S S Ranjan told PTI earlier in the
day that the proposed move will hlep the lender
to raise around Rs 12,000 crore.

Source:PTI