UBI IPO to hit the market by January 2010


Bangalore: United Bank of India (UBI), one of the few unlisted state-run lenders, announced that it would muster up to 500 crore by diluting 15 percent of the government's equity in an IPO by January 2010. Satish C Gupta, Chairman and MD, UBI said, "We have sought the formal approval for IPO by the government. We would file draft red herring prospectus with the Securities and Exchange Board of India (SEBI) sometime in October after our accounts for the period till September 30, 2009 are audited." Earlier, the government approved capital restructuring of the bank, which would reduce paid up capital in the bank from the current 1,532 crore to 266 crore. This would enable the bank to get better pricing for its IPO. Face value of the total equity offloaded is likely to be 50 crore, which means that 400 crore to 450 crore will be the total premium in the IPO. The government would offload 15 percent of its equity in the bank. UBI is the one of the few nationalized banks where the government holds the entire 100 percent equity. The other lender is Punjab and Sind Bank.