CARE assigns Grade 4 to the proposed IPO of Punjab & Sind Bank

NEW DELHI: Rating agency CARE today assigned ' IPO Grade 4', indicating above average fundamentals, to the proposed public offer of Punjab & Sind Bank (PSB), the only unlisted nationalised bank.

CARE assigns IPO grades on a scale of Grade 5 to Grade 1, with Grade 5 indicating strong fundamentals and Grade 1 indicating poor fundamentals, the rating agency said in a statement.

The grading derives strength from 100 per cent Government of India ownership of the bank, long track record of operations of over 10 decades, its established position in northern India and expanding network of branches and ATMs, it said.

The grading also factors in the bank's healthy asset quality, strong growth in asset base, it said.

The grading is however constrained by the bank's relatively small size, regional concentration, low technology orientation and declining proportion of low cost deposits, it said.

The bank is proposing an initial public offering (IPO) of 4,00,00,000 equity shares of face value of Rs 10 through 100 per cent book building process.

IPO grading assigned to any individual issue represents a relative assessment of the fundamentals of the issuer, it said.

PSB has already got Securities and Exchange Board of India's clearance for the IPO which is expected to hit the market during this month.