PSB puts off IPO plan to next fiscal

New Delhi, July 26 | Updated: Jul 27 2006, 05:30am hrs
State-run Punjab and Sind Bank (PSB), which has registered an impressive turnaround in its performance in 2005-06, is set to postpone the launch of its initial public offer (IPO). Now, the IPO would be launched only in 2007-08.

Earlier, PSB, along with United Bank and Central Bank, was slated to hit the market in the current fiscal.

RP Singh, chairman and managing director, PSB, said though IPO was planned for the current fiscal, it would be postponed as sentiments were down due to the crash in the stock market. "We will wait for the right time for the launch of IPO.

Currently, the market sentiments are at a low and we do not think that this would be the right time to launch IPO," he said.

He added that though the bank has recorded a net profit of Rs 108 crore in 2005-06, the expected strong financial results of the current fiscal would be more benefitial. Singh said the bank has already raised Rs 150 crore in the form of tier II capital. The bank, which has a capital adequacy ratio of over 12%, is now comfortably placed and is not in any immediate need of capital.

However, the chairman said the bank may look at raising capital through the hybrid instruments permitted by the Reserve Bank of India.

"We may look at raising capital through the hybrid instruments in case we require further capital. However, we are comfortably placed in terms of capital and the need should not arise," he added.

The bank, which is among the five banks, which met the projected targets, registered a deposit and advance growth of 19.43% and 41% respectively.