Subscribe to Punjab & Sind Bank IPO:Eastern Financiers

MUMBAI: Eastern Financiers is of the view that valuations of Punjab & Sind Bank are at a discount to some of the mid-sized peer banks. It has recommended investors to ‘Subscribe’ to Punjab & Sind Bank IPO.

“The bank’s EPS for FY 2010 on post-IPO equity works out to Rs 22.4. Considering the higher price band of Rs 120 per share, post-IPO book value (BV) is Rs 107 per share and adjusted BV (ABV) Rs 101.8 per share. At a lower price band of Rs 113 per share, post IPO BV is Rs 105.7 per share and ABV Rs 100.5 per share.

At the price band of Rs 120 to Rs 113 (without considering the discount of 5% to retail investors and eligible

employee), P/BV at both the bands is 1.12 and 1.07, while P/ABV 1.18 and 1.12 respectively. P/E range stands at 5.4 to 5.

The issue is an attractively priced issue. The valuations are at a discount to some of the mid-sized peer banks. We recommend SUBSCRIBING to the issue,” the report said.