Of the total public issue amount, Rs 1.25 crore worth shares are reserved for permanent employees and working directors of the bank. The net public offer is Rs 33.75 crore. The bank has also obtained RBI's nod for NRIs/OCBs and FIIs to apply in the public issue on repatriable basis up to a maximum of Rs 8.4 crore. Times Bank is offering equity shares at a price-earning multiple of 3.69 (based on the EPS of Rs 2.71 for 1998-99) and the current book value of the share is Rs 16.88. The offer price of Rs 10 is 0.59 times of its book value.

According to the managing director of Times Bank, N B Javeri, the public offer is priced at par as the bank seeks to provide investors with a better deal. ``We believe not only in balance sheet growth as it has its risks too, butnon-fund based activities thereby enhancing shareholder value. The customer satisfaction is the key to achieve this,'' he said. Outlining the future strategy, he said: ``Our goal is to become a service national bank in the next three years.''

The public issue is to comply with the RBI guideline as the promoters were required to dilute their stake. Post-issue, promoters' holding will reduce to around 74 per cent and for a period five years, the bank is required to bring it further down to 40 per cent. While ruling out the possibility that promoters will divest their stake in the bank, Javeri said that the bank was planning to have a strategic foreign partner who would have equity stake in the bank.

As on March 31, 1999, the bank posted a net profit of Rs 27.06 crore on a total income of Rs 327.04 crore. The net profit growth of 15 per cent is not very impressive on an y-o-y basis. The bank has a deposit base of Rs 3011.18 crore and advances were Rs 1311.96 crore. The bank has investments to the tune of Rs1043.41 crore.

The bank is giving a renewed thrust to fee-based income as corporates are facing a squeeze on their margins, according to Javeri. For the current fiscal 1999-2000, the bank is expecting a turnaround in its performance as net profit is expected to grow by almost 71 per cent to Rs 46.13 crore on a total income of Rs 341.57 crore. Although Times Bank has a low net NPA of 3.01 per cent compared with other private sector banks, the bank has seen a sharp rise in NPAs in the past three years. From Rs 4.89 crore in 1997, NPAs rose to Rs 39.48 crore as on March 31, 1999. The bank has now set up a risk management group for recovery of bad loans and the bank expects to bring the NPAs down to 2 per cent by 1999-2000.

After the issue, the paid up capital will rise from Rs 100 crore to Rs 135 crore. This will improve the current capital adequacy ratio of 9.97 per cent. Lead managed by JM Morgan Stanley, the IPO closes on July 10 and the shares will be listed at Delhi, Mumbai, Calcutta and National StockExchange.