Govt to revamp Punjab & Sind Bank, pave way for IPO

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The government will restructure the capital base of unlisted state-run lender Punjab and Sind Bank to improve valuations before it launches an initial public offer, a minister said on Friday.

Kapil Sibal, a senior minister in charge of Science and Technology, said the cabinet has approved a capital restructuring plan that involves conversion of a major portion of the bank's equity into bonds and preferance shares.

The government will convert 1.6 billion rupees of equity into tier-I debt and another 2 billion rupees of equity into preference shares under tier-II debt, he told a news conference after a cabinet meeting.

The bank will have an equity capital of 1.83 billion rupees after the restructuring, Sibal added.

The capital restructuring will help the bank expand in compliance with Basel-II requirements, and get a "reasonable" premium in an initial public offering, minister Kapil Sibal said.