DCB promoter holding to fall by 2-3 per cent after QIP next fiscal

MUMBAI: Private sector Development Credit Bank ( DCB) is mulling a QIP of Rs 150-crore in about six-months time which will further reduce its promoter holding by 2-3 per cent, a top bank official said.

The bank, back on the growth-track with a Rs 8.17-crore profit in Q3 FY 11 as against a loss of Rs 18.09-crore in the year-ago period, will, as a strategy, focus on micro-SMEs, SMEs and retail while aiming for a limited growth in the mid-corporate segment, he said.

"We plan to raise Rs 150-crore through a QIP in the next fiscal to fuel our business growth and have already obtained Board approval for it," DCB's Managing Director & CEO, Murali Natrajan, said in Mumbai.

The Rs 150-crore QIP would be done in the next 6-8-months after evaluating market conditions, he said, adding that the promoter holding in the bank which presently stands at 23 per cent would then decline by another 2-3 per cent.

"We have given a road-map to the Reserve Bank to bring down our promoter holding to 10 per cent by March 2014. It has already come down to 23 per cent from 26 per cent following a Rs 81-crore QIP in November 2009," Natrajan said.

DCB's strategy of focussing on micro-SMEs, SMEs and retail mortgages is beginning to pay dividends, he said, adding it now aims to up its advances to the micro-SME and SME sectors to 40 per cent of its total advances in the next two-years from the present 21 per cent.

Boosting its current account, savings account (CASA) percentage to around 40 per cent in the next two-years from the present 33 per cent and reducing its NPAs are the other prime focus areas, Natrajan said.

The bank's net NPA stands at 1.3 per cent as at end-Q3 while its gross NPA level is still at a high 7 per cent. "We aim to reduce our gross NPAs and strengthen our balance-sheet further going forward," Natrajan said.