To issue 5% of paid up capital to LIC as a preferential allotment: MD Mallya, Bank of Baroda

In an interview with ET Now, MD Mallya, CMD, Bank of Baroda, talks about the company's plans for the preferential issue to LIC/Mutual Funds. Excerpts:

ET Now: What is the quantum of the preferential allotment and the number of shares that the bank would be looking at?

MD Mallya: We are issuing 5% of our paid up capital to the LIC as a preferential allotment. The number of shares that will be issued will be 19.6 crore to LIC.

ET Now: How much money does this enable the bank to raise? Would you need to raise more funds?

MD Mallya: It would be raised in the current financial year that is by March 2012. The shares would be issued at a premium determined as per SEBI formula. The total quantum of the capital which we are likely to raise by using 5% of paid up capital will be about Rs 1600 crores based on the present market value.

ET Now: Is this all that you need in terms of fund requirement?

MD Mallya: As far as our overall capital adequacy ratios are concerned, it has been very robust. It is already in excess of around 14% with the tier 1 capital around 10%. We are raising it from the point of view of maintaining quite a robust capital adequacy keeping in mind the Basel III recommendations which are likely to be effective.

So, it is a combination of the need to have very robust capital position and also to have funds for the sustainable growth of the bank.

ET Now: There is a bit of clarity that is also required on the Rs 200 crore interim finance being discussed for Kingfisher Airlines. Is there an update on that?

MD Mallya: I have nothing to say on any specific counter. I am also not aware of any recent developments