NEW DELHI, Nov 21: The board of directors of Punjab National Bank (PNB) on Friday cleared the proposal for the bank's maiden equity issue to be priced at a premium of Rs 61-75 per share. The issue is expected to open in January 1998. The bank will offer approximately seven crore shares. An issue price of Rs 71 per share will translate into an issue size of Rs 497 crore while an issue price of Rs 85 will translate into an issue size of Rs 595 crore.While Punjab National Bank currently has a paid-up capital of Rs 350 crore, it wants to return Rs 138 crore to the government. This will enable the bank to reduce the capital to Rs 212 crore. After the issue the bank will have a paid-up capital of Rs 282 crore.

About four crore shares will be on offer to the public with almost half of the issue being reserved for various categories.

Of the three categories comprising employees, non-resident Indians and mutual funds, 10 per cent of the issue will be reserved for each category.The Punjab National Bank's shares will be listed on the National Stock Exchange, Bombay Stock Exchange and Delhi Stock Exchange.

As of March 31, 1997, Punjab National Bank has a book value of Rs 27. It had a book value of Rs 21 in 1995-96.

In 1996-97 the bank recorded an operating profit of Rs 619 crore and a net profit of Rs 237 crore which gives it an earning per share of Rs 6.78. In 1995-96, the bank had recorded a net loss of Rs 95 crore on account of provisions for depreciation on its securities portfolio.

It registered an operating profit of Rs 384 crore in 1996-97.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.