'Subscribe' to Punjab and Sind Bank IPO: IIFL
IIFL has recommended investors to ‘Subscribe’ to initial public offering of Punjab and Sind Bank. The government owned bank has come out with issue of 40 million shares in the price band of Rs 113-120 per share.
By ET Bureau |
MUMBAI:IIFL has recommended investors to ‘Subscribe’ to initial publicoffering of Punjab and Sind Bank. The government owned bank has come out withissue of 40 million shares in the price band of Rs 113-120 per share. The issuecloses Thursday.
“With CAR at 13%, PSB is well poised for abrisk balance sheet growth. Further, tie-ups with Aviva (for life insurance),Bajaj Allianz (for general insurance) and UTI MF (distribution of mutual fundproduct) should shore up its fee based income.
While uncertaintiesover fresh pension liability remains; strong GoI parentage, dominant presence inNorth India, particularly in Punjab, and healthy returns ratio are the keypositives. SUBSCRIBE,” the report said.
Punjab & Sind Bank,with 926 branches is predominantly present in North and Central India. Its keystrengths are: a) amongst the lowest NPAs in the PSU space (GNPA <1%), b)adequate capital (CAR at 13%), c) strong GoI holding (82% post dilution) and d)healthy returns ratio (avg RoE/RoA at 22%/1.0%).
The capitalrestructuring done in late 2008 has enhanced book value of the bank to Rs111,translating into a valuation of 1.0x-1.1x trailing P/BV at the IPO priceband.
“With CAR at 13%, PSB is well poised for abrisk balance sheet growth. Further, tie-ups with Aviva (for life insurance),Bajaj Allianz (for general insurance) and UTI MF (distribution of mutual fundproduct) should shore up its fee based income.
While uncertaintiesover fresh pension liability remains; strong GoI parentage, dominant presence inNorth India, particularly in Punjab, and healthy returns ratio are the keypositives. SUBSCRIBE,” the report said.
Punjab & Sind Bank,with 926 branches is predominantly present in North and Central India. Its keystrengths are: a) amongst the lowest NPAs in the PSU space (GNPA <1%), b)adequate capital (CAR at 13%), c) strong GoI holding (82% post dilution) and d)healthy returns ratio (avg RoE/RoA at 22%/1.0%).
The capitalrestructuring done in late 2008 has enhanced book value of the bank to Rs111,translating into a valuation of 1.0x-1.1x trailing P/BV at the IPO priceband.
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