Pune, July 15: Indusind Bank's public issue is likely to carry a premium of Rs 28 to Rs 30 per share of Rs 10. The bank plans to hit the market with a Rs 45- crore public issue by September this year. The bank is seeking to link the public offering with a 1:2 preferential issue to its existing shareholders, S Solomon Raj, managing director of the bank, told The Financial Express. He, however, said that the premium of the public issue is yet to be decided.

Raj, who was in Pune for the third annual general meeting (AGM) of the bank today, was hopeful that the Reserve Bank of India (RBI) would clear the question of the preferential and public issues within the week.

Agitated shareholders had earlier questioned the pricing of the preferential issue of Rs. 10 crore which has been approved at an extraordinary general meeting (EGM) in April 1997, and had wanted it at par. It was pointed out that with the book value being Rs 23 per Rs 10 share, the RBI has disallowed a lower-than book value pricing. Raj assured shareholders that a rights allotment could be worked out at half the price of the public issue price, which would effectively work out to Rs 37 on a 1:2 basis or Rs 35 on a 1:1 basis. He added that the interests of those who subscribed to the bank's private placement at a premium of Rs 40 would be protected at the time of the public issue.

The bank, which had earlier declared a 10 per cent interim dividend, declared another 10 per cent dividend, making a total of 20 per cent for 1996-97.

During 1996-97, IndusInd Bank's deposits were Rs 3.093.10 crore, advances of Rs 1927.65 crore, operating profit of Rs 124.94 crore and net profit was Rs 73.32 crore.

Raj said projections for 1997-98 were deposits of Rs 4,800 crore, a 60 per cent growth, and advances of Rs 3,000 crore. The effort would be to maintain a 60 per cent credit deposit ratio, he added.The bank will open ten more branches this year, taking the total to 28. Of the ten new branches, three will be in semi-urban areas and seven in metros. Among thos that will be opened before December are in Jaipur and Baroda.

The bank will also increase its fee-based activities and increase its presence in retail banking by offering capital market products.

Raj pointed out that in 1996-97, the bank accounted for a total of about 8 per cent of the NSE's total turnover. Among the products to be launched this year are Advisory Services for forex management, focussing on long term rupee- dollar swaps and other hedging products. He added that by the end of this month, the bank would open investment boutiques in Mumbai, Chennai and Ahmedabad which would advise customers on deploying surplus funds.

There has been a substantial credit offtake during the first quarter of this year which has helped us increase our advances, said Solomon Raj. Fuelled by higher export credits the new private sector banks have recorded a ten per cent growth in credit between April and June this year.

The growth has been significant when compared with a 0.6- percent negative growth in the entire banking industry.While scheduled commercial banks showed a negative credit growth private banks on the other hand survived because of export growth during the first quarter.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.