CCEA to weigh P&SB capital recast on Friday
The Cabinet committee on economic affairs (CCEA) is likely to consider the equity restructuring proposal of Punjab & Sind Bank (P&S Bank).
By Niranjan Bharati, ET Bureau |
NEW DELHI: The Cabinet committee on economic affairs (CCEA) is likely to consider the equity restructuring proposal of Punjab & Sind Bank (P&S Bank) on Friday, paving the way for the proposed initial public offer (IPO) of the Delhi-based public sector lender.
The bank plans to convert a part of its capital into preferential shares which would be held by the government. This exercise will help the bank fetch a better premium on its shares. P&S Bank has equity capital of Rs 743 crore, of which it has proposed to convert Rs 500 crore into preference shares.
���The finance ministry has agreed to the banks equity restructuring proposal and the matter is likely to be taken by the CCEA for final approval,��� an official source said.
The government is considering dilution of 10% stake in the bank through the proposed IPO. P&S Bank and Kolkata-based United Bank of India (UBI) are the only two banks which are 100% owned by the government.
PSB had been looking at an IPO for several years, but the proposal could not fructify due to reasons related to appointment of independent directors and opposition from the employees union. The bank is still short of one independent director on its board and the government would have to fill this vacancy before P&S Bank goes to Sebi with a draft red herring prospectus.
Left parties were opposed to dilution of government stake in banks. Since the Left has parted ways with the UPA, the government is likely to push ahead with IPOs for banks.
The bank plans to convert a part of its capital into preferential shares which would be held by the government. This exercise will help the bank fetch a better premium on its shares. P&S Bank has equity capital of Rs 743 crore, of which it has proposed to convert Rs 500 crore into preference shares.
���The finance ministry has agreed to the banks equity restructuring proposal and the matter is likely to be taken by the CCEA for final approval,��� an official source said.
The government is considering dilution of 10% stake in the bank through the proposed IPO. P&S Bank and Kolkata-based United Bank of India (UBI) are the only two banks which are 100% owned by the government.
PSB had been looking at an IPO for several years, but the proposal could not fructify due to reasons related to appointment of independent directors and opposition from the employees union. The bank is still short of one independent director on its board and the government would have to fill this vacancy before P&S Bank goes to Sebi with a draft red herring prospectus.
Left parties were opposed to dilution of government stake in banks. Since the Left has parted ways with the UPA, the government is likely to push ahead with IPOs for banks.
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