Subscribe to United Bank of India IPO, says SPA Securities
SPA Securities has advised investors to ‘Subscribe’ to initial public offering of United Bank of India.
By ET Bureau |
MUMBAI: SPA Securities has advised investors to ‘Subscribe’ to initial public offering of United Bank of India.
UBI, a public sector banking institution with 100 per cent GOI holding has branches in 28 States and in 4 Union Territories in India. As of January 31, 2010, UBI had 1,505 branches, 270 ATMs, 10 extension counters
and 1representative office in Dhaka, Bangladesh. It had a workforce of 16,768 employees. This issue has only fresh shares to be offered, GOI is not selling its shares in UBI.
“UBI’s dominant presence in East and North-East gives it access to high CASA, resulting in lower cost of funds. High growth rates for deposits and advances coupled with its aim to grow pan India makes us positive on the company. On the upper band of Rs. 66, UBI is available at P/E of 4.5x on its annualized earnings for FY10 and P/BV of 0.7x on its post issue shares and networth. We find the valuations attractive vis-à-vis its peers and recommend investors to “Subscribe” to the issue,” the recommendation said.
The IPO of 5 crore shares opens Tuesday and the bank has fixed the price band in the range of Rs 60-66. The issue closes Thursday. The bank will raise between Rs 300 crore to Rs 330 crore from the issue.
UBI, a public sector banking institution with 100 per cent GOI holding has branches in 28 States and in 4 Union Territories in India. As of January 31, 2010, UBI had 1,505 branches, 270 ATMs, 10 extension counters
and 1representative office in Dhaka, Bangladesh. It had a workforce of 16,768 employees. This issue has only fresh shares to be offered, GOI is not selling its shares in UBI.
“UBI’s dominant presence in East and North-East gives it access to high CASA, resulting in lower cost of funds. High growth rates for deposits and advances coupled with its aim to grow pan India makes us positive on the company. On the upper band of Rs. 66, UBI is available at P/E of 4.5x on its annualized earnings for FY10 and P/BV of 0.7x on its post issue shares and networth. We find the valuations attractive vis-à-vis its peers and recommend investors to “Subscribe” to the issue,” the recommendation said.
The IPO of 5 crore shares opens Tuesday and the bank has fixed the price band in the range of Rs 60-66. The issue closes Thursday. The bank will raise between Rs 300 crore to Rs 330 crore from the issue.
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