SBT public issue soon

MUMBAI, Nov 24: The State Bank of Travancore SBT, a subsidiary of State Bank of India, is coming out with its maiden public issue of 15 l...

MUMBAI, Nov 24: The State Bank of Travancore SBT, a subsidiary of State Bank of India, is coming out with its maiden public issue of 15 lakh equity shares of Rs 100 each for cash at a premium of Rs 500 per share aggregating Rs 69.24 crore on December 8 to augment its capital base.

While SBI will acquire 3.6 lakh shares on a firm allotment basis, the remaining 11.54 lakh shares are being offered to public. The bank which has a huge Non-Resident Indian NRI deposit base of Rs 2500 crore has reserved 20 per cent of the issue to NRIs/OCBs on repatriable basis and 10 per cent to its employees. The net offer to the Indian public will be 8,07,800 shares. The minimum application is for five shares. The other major shareholder of SBT is the Kerala government. There is a ceiling of maximum 200 shares that can held by individual investors due to the SBI Act which prohibits individual shareholders from holding more than 200 shares in its subsidiaries.

While the bank has a total deposit of Rs 6652.89 crore it recorded a net profit of Rs 40.25 crore. The bank has 665 branches 544 in Kerala and enjoys 21 per cent market share of the total deposits in the state.SBT8217;s total advances stood at Rs 3659.30 crore and total investments Rs 2626,21 crore at the end of last financial year. Its net NPA is 9.5 per cent and gross NPA of 14.5 per cent.

The major risk factors include the 50 claims pending against SBT as on July 31, 1997 amounting to Rs 37.71 crore apart from 81 cases relating to employees of the bank, income tax and interest tax proceedings worth Rs 20 crore before the appalite tribunal and a contingent liability of Rs 1414.43 crore.

The state government holds around 52,500 shares in SBT. The bank has a credit-deposit ratio of 54 per cent, but within the state it is around 45 per cent. SBT Managing Director G G Vaidya said that the state government has not issued any directive to withdraw the deposits of the Kerala government run public sector units and other government departments. He also did not disclose the total deposit of the state undertakings in SBT.