Following the footsteps of its peers, the Kolkata-based UCO Bank has priced its Rs 240 crore (Rs 2.40 billion) initial public offer at an attractive Rs 12 a share to woo retail investors.
"In the past, most of the PSU banks had priced their IPOs at Rs 10. All these scrips have shown capital appreciation. We would also like to give some value addition to the investors," UCO Bank chairman V P Shetty said, announcing the IPO in New Delhi on Tuesday.
Bank IPOs floated in the last few years have been a success as banks like Indian Overseas Bank, Allahabad Bank, Vijaya Bank and Syndicate Bank, had deliberately pegged the price at face value.
Only Punjab National Bank priced its IPO at a premium and yet seen a significant gain in the value.
UCO Bank targets to mop up Rs 240 crore from the IPO opening on September 3 and closing on September 10.
The government holding will come down to 74.98 per cent after the IPO, while raising the capital base to Rs 799.36 crore (Rs 7.99 billion), Shetty said.
The bank's capital adequacy ratio is also slated to go up to 11 per cent from 10 per cent.
The bank is keeping aside 10 per cent of the shares for its employees, Shetty said.
The erstwhile weak bank has wiped off its entire accumulated loss and targets to double its business to Rs 1,00,000 crore (Rs 1,000 billion) by 2007.
He said the bank is to incur a capital expenditure of Rs 184 crore (Rs 1.84 billion) for core banking and other information technology related activities over the next two years.