UCO to hit the St in new fiscal

KOLKATA: UCO Bank, which recently received clearance from the finance ministry for a follow-on public offer, has indicated that it will hit the equity market in the new fiscal. The Uco board has also cleared the plan to issue 6-crore equity shares at face value of Rs 10 per share with a suitable premium. Following the exercise, the government holding in Uco will reduce to 57.33% from 63.59% now. According to bank estimates, it may end up mobilising around Rs 400 crore.

Uco Bank chairman and managing director SK Goel told ET: “There’s hardly any time left in 2009-10. We will plan the issue in such a way that the mobilised capital via FPO will be used in 2010-11 for business expansion.” Mr Goel categorically indicated Uco will raise capital only through the FPO route. “There is no possibility of a qualified institutional placement of shares,” he said.

The CMD said the bank also expects the government to infuse Rs 500 crore soon as part of the government’s drive to shore up capital adequacy over 12% in select public sector banks. “The government has cleared Rs 750 crore as fresh capital infusion but will release only Rs 500 crore for the time being. We expect the government to release it soon,” he said.

“Once we get this capital, there will be no hurry to raise more funds via FPO,” the chairman added.
Under the government’s capital injection plan, Uco is slated to receive Rs 1,250 crore from it. The bank has already received Rs 450 crore from the government in Q1 of 2010.

Uco Bank aims to grow its total business (deposits plus advances) to Rs 2.02 lakh crore by March 31, 2010, from the December 31, 2009’s position of Rs 1.78 lakh crore.