PNB may defer plans to sell stake in PNB Gilts
Punjab National Bank, which is planning to exit from its primary dealership business, may consider shelving the plan as the bank has not received appropriate bids for its subsidiary PNB Gilts.
By PTI |
NEW DELHI : Punjab National Bank, which is planning to exit from its primary dealership business, may consider shelving the plan as the bank has not received appropriate bids for its subsidiary PNB Gilts.
PNB has got just two bids for the stake sale. However, it had expected about six bids, sources said. The bank's board will be meeting in the next few days to weigh various options including deferring the plan to exit from primary dealership business, sources said.
Two bidders Edelweiss Capital and Goldman Sachs have evinced interest in picking up the bank's holding in the subsidiary, they said.
The last date for submission of the Expression of Interest (EoI) for the primary dealership arm was August 14.
PNB holds 74 per cent stake in the entity, while the rest is with retail and institutional investors. The entity has
a paid-up capital of Rs 135 crore.
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The bank has appointed Enam Securities as the merchant banker for the sale process. Shares of PNB Gilts closed down about 5 per cent at Rs 26.20 on the Bombay Stock Exchange on Friday. PNB Gilts derives its revenue from brokerage arising out of dealing in government securities and interest income, besides from trading profit in the same.
The company reported over four-fold jump in profit before tax at Rs 67.01 crore for fiscal 2007-08.
It had recorded a PBT of Rs 16.38 crore during the same period a year ago.
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The turnover of the company, which is a primary dealer in the government securities, increased to Rs 59,868 crore in FY 2008, compared to Rs 33,745 crore last year. Start a SIP with as low as ₹500 with ET Money App!
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