‘Subscribe’ to Punjab and Sind IPO: KR Choksey

MUMBAI: KR Choksey has recommended investors to ‘Subscribe’ to initial public offering of Punjab and Sind Bank. The issue of 40 million shares in the price band of Rs 113-120 per share opens today.

“At the upper band, the issue is reasonably priced at 0.69x P/ABV of FY12E ABV of Rs 172 and 3.5x P/E on FY12E EPS of Rs 34.7.

On lower band, it is priced at 0.65x P/ABV and 3.3x P/E. Considering strong credit CAGR of 31% over FY10-12E, sustainable healthy margin of ~2.5%, superior asset quality, impressive returns and 24% CAGR in earnings, we recommend to SUBSCRIBE the issue,” the report said.

Punjab & Sind Bank is a wholly owned bank by the central government. The bank has 926 branches, 63 ATMs across India predominantly in Northern region and 8,047 employees. It has ~110 branches in NCR region only. As on September 2010, it surpassed 88,000 crore mark in terms of business.

The issue closes Thursday.