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Tayals likely to cut BoR stake to 25%

The Tayals, the promoters of Bank of Rajasthan (BoR), are likely to bring down their stake in the 64-year-old private bank to around 25% from the current 43.9%. The bank is likely to go in for a series of preferential allotments to Indian and overseas investors. Private sector bank promoters have been under pressure to bring down their stakeholding in the bank to 10%.

The board of BoR on Friday issued 2.35 lakh shares and warrants to investors, including BNP Paribas and Avenue Capital Group. They include 65 lakh shares at Rs 200 per share to Glasia Mauritius II (Avenue Capital Group), 70 lakh shares to BNP Paribas at Rs 200 per share, 35 lakh warrants to Naman Developers at Rs 202 per warrant and 65 lakh warrants to Darashaw & Company for Rs 202 per warrant. The bank would garner Rs 471 crore through the fresh issue of shares.

The bank had earlier issued one crore shares at a price of Rs 166.75 per share on a preferential basis to Indus Capital Partners LLC New York and Max India. In recent months, the RBI has been pressurising private banks to bring down their promoter holding. Promoters of Dhanalakshmi Bank — another old private sector bank — have also bought down their holding from 37% in June-end to less than 10% by September.

BoR deputy managing director Deepak Saruparia said, “Post-issue, the promoter holding in the bank would come down to around 32%. The warrants would be converted over a period of 18 months, as and when the bank needs capital. The bank is likely to go in for additional preferential issuance of around two crore shares in this financial year.”

Sources said in the next board meeting, the bank could make additional preferential issue to a host of other investors. By the end of the year, the promoter holding in the bank could come down to around 26%. The net worth of the bank would go up from around Rs 800 crore to Rs 1,200 crore by the end of the year. The bank has asked for more time from the regulators to bring down the promoter holding.

Incidentally, this would be the first time in recent times that a private sector bank has made a preferential issue to a foreign bank — BNP Paribas. In most of the recent cases, foreign banks have been picking up stake in private sector banks from the secondary market. This is the first time that the French bank is picking up a stake in a private sector bank in the country.

Source: Economic Times

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