The Hindu Business Line : Vijaya Bank plans Rs 100-cr public issue

CLOSE on the heels of banking scrips heading towards north across the bourses during the recent times, Vijaya Bank, which had earlier withdrawn its proposal to return Rs 100-crore capital to the Government, has now decided to further augment its capital by making a public issue of 10-crore equity shares of Rs 10 each for a face value of Rs 100 crore.

The bank management has decided to place the resolution before the shareholders and seek their approval at the ensuring annual general meeting for the proposed public issue.

The board has resolved to issue equity shares to the public for an aggregate face value of Rs 100 crore, while the offer price of the shares would be determined by it at a later stage.

"To meet the needs of the increased volumes and level of business, the capital is a core necessity and hence the bank proposes to raise capital in the form of equity shares to an extent of face value of Rs 100 crore to meet increased level of business and the capital adequacy requirement of the bank," the shareholders were informed through a notice.

The bank told them that the proposal was approved by the board and was currently awaiting the approval of the Reserve Bank of India and the Union Government in this regard.

At present, the authorised share capital of the bank stands at Rs 1,500-crore, while the paid-up equity capital stands at Rs 333.51 crore. Of this, the Government currently holds 70.02 per cent and the balance 29.98 per cent is being held by the public.

Consequent upon the proposed public issue, the paid-up equity capital would stand increased to Rs 433.51 crore. While the holding of Government would go down to 53.87 per cent, that of public would significantly increase to 46.13 per cent.

The bank had earlier raised Rs 150 crore through Tier-II subordinated bonds during November last year. Further, an amount of Rs 154.54 crore was transferred to reserves from the profits during the last fiscal year. As a result of this, the capital adequacy ratio improved to 12.66 per cent as on March 31, 2003 compared to 12.25 per cent as on March 31, 2002.

Though the bank had originally proposed to return a capital of Rs 125.72 crore to the Government, keeping in view the need for capital for the growing business, it had later sought and obtained the permission of the Government to withdraw the proposal to return a equity of Rs 100 crore from the originally envisaged amount of Rs 125.72 crore.

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Vijaya Bank plans Rs 100-cr public issue