Admits M M Agarwal, DGM (credit and merchant banker), UTI Bank, ``We will use our promoter's network and wide-reach in every nook and corner of the country to sell our issue. Apart from our own depositors, we will also target UTI's investor base.''

According to agencies marketing the UTI Bank IPO, a series of meetings have been planned with UTI's agents to hard-sell the issue to their clients. UTI has also reportedly written to its agents across the country to see the bank IPO through. Merchant bankers managing the issue say it is important to hitch on to the UTIbandwagon in selling the IPO in view of the bank's not-so-strong financials. Says an official with one of the lead managers to the issue, ``UTI Bank has very little to offer investors except UTI's brand equity.'' Sources also say UTI Bank is handicapped because of its small retail base and has no option but to piggy-back on UTI's mass reach.

Sources say the bank is also keen to tap the large investor base of UTI's flagship, Unit Scheme 64. The scheme has a corpus of over Rs 20,000 crore with an investor base of about 2 crore. According to them, UTI Bank plans to provide loans against US-64 units on favourable terms to invest in the IPO. However, bank officials deny such a move. Said a senior bank offical, ``We provide loans to US-64 investors; but whether they want to use it to invest in the bank IPO or any other purpose is their discretion.''

Even the offer document highlights the synergies of business between UTI and UTI Bank. "Synergies between the bank and its promoter provide opportunities such asacting as bankers, collecting agents, etc. for fast-track growth in business and consequent profit in future years." UTI Bank chairman and managing director Supriya Gupta also highlighted this synergy and said, "A major chunk of our business comes from UTI. At present, over 10 banks handle UTI's business, but we get a major portion of their business like the money market mutual fund."

The reason why UTI Bank will need its promoters' help to see its IPO through is its poor earning per share, low book value and high net non-performing assets. The bank had an EPS of Rs 1.53 as on March 31, 1998, which could get further diluted thanks to the increase in equity capital post-issue (The IPO comprises a public offer of 1.5 crore shares and an offer for sale of 2 crore shares from UTI). The net NPA-level at 5.63 per cent. as on March 31, 1998, which is high by the industry standards. Besides, the shares are priced at a premium of 51 per cent to the book value of Rs 13.87. All bank issues which have hit the marketin the current financial year have been at a steep discount to their book values. For example, the South Indian Bank public issue was priced at Rs 32 on a book value of Rs 50.18.