MUMBAI, Aug 12: The Industrial Development of Bank of India (IDBI) has posted a 38 per cent rise in its net profit to Rs 327 crore in the first four months of 1997-98 compared with Rs 237 crore in the year-ago period. Its net profit jumped 13.6 per cent to Rs 1,144.2 crore in 1996-97.

Sanctions have witnessed a 51 per cent jump, while disbursements have fallen 6 per cent. The bank had to account for a tax liability of Rs 117 crore as against 187 crore during the corresponding period of 1996-97. Sanctions had dipped 4.2 per cent, while disbursement increased 7 per cent during 1996-97.

IDBI chairman and managing director SH Khan, while addressing the third annual general meeting in Mumbai, said the operating income had gone up 19 per cent during the period.

He said sanctions through direct assistance have spurted 76 per cent, while disbursement has jumped 4.5 per cent during the period. IDBI had recorded a capital gains tax amounting to Rs two crore compared with 10 crore accrued during the corresponding period of 1995-96.

Refinnacing and rediscounting have fallen drastically by 50 per cent during the year. ``The business in this segment has shrunk as the liquidity in the system has drastically improved,'' Khan said.

The Industrial Development Bank of India's operating expenditure has also fallen 12.5 per cent during the year, Khan said, adding that 98 per cent of the operating expenditure constitute the interest expenditure. The cost of the its rupee borrowing for the first four months has moved southward to 13.2 per cent from 16.6 per cent.

Responding to shareholders' concern about the institution's scrip price which is much below the offered price of Rs 130, Khan said the institution had fulfilled all promises on profit, dividend, book value and earnings per share (EPS) that it had made in the prospectus while going public.

``The share can easily be pegged at Rs 200 at present,'' he said, adding that he has failed to understand the low-key attitude for the share. ``I think it has much to do with the media and analysts, who have not painted a bright future of the instititution's activities,'' he said.

The earnings per share has gone up to Rs 16.76 from Rs 15.51 during the last two years. The book value of the the institution moved up to Rs 107 from Rs 24 since the public issue. The Industrial Development Bank of India stock is currently traded at a price-earnings multiple of around six, said Khan.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.