MUMBAI, November 4: The State Bank of Bikaner and Jaipur (SBBJ) has raised its authorised capital to Rs 100 crore from Rs 50 crore. The bank, a wholly-owned subsidiary of the State Bank of India, is the first SBI associate to hike its authorised capital to Rs 100 crore.

SBBJ managing director KR Maheshwari said the bank's board has already passed a resolution to this effect and the board of the parent bank has given its "in principle" approval to the proposal. The SBI associate is planning to hit the market in the second half of 1998 for the second round of disinvestment. The bank, which is slated to hit the capital market with a Rs 65.94 crore equity issue on November 20, is the first SBI associate to tap the equity market. The SBI's stake, which is pegged at 99.21 per cent at present, will come down to 75 per cent after the public issue. Subsequently, the public shareholding will go up to 25 per cent from 0.79 per cent.

Maheshwari said that the present equity issue will take care of the capital adequacy ratio (CAR) for the current financial year, but in the next fiscal another equity issue will be needed to shore up capital adequacy. As of March 31, 1997, the bank's CAR was pegged at 8.82 per cent down from 9.59 per cent recorded in March 1996. In an incentive to the small investor, the bank has reserved 50 per cent of its net offer for investors who have applied for 100 equity shares or less. This reservation may be increased in consultation with the regional stock exchanges.

The bank has also reserved 1,52,700 equity shares for non-resident Indians and overseas commercial bodies. The issue is not underwritten.

Maheshwari said the Rs 440 premium is "conservative". The EPS of the bank during 1995-97 went up to Rs 121.24 from Rs 54.62 while book value per share has increased to Rs 529.46 from Rs 331.48 He added that the gross profit of the bank has increased at a compounded annual growth rate of 34.12 per cent during 1995-96 while the net profit increased at a compounded annual growth rate of 97.1 per cent. Net profits grew to 44.13 crore from 11.36 crore during the period. The reserves of the bank also increased 3.26 times from Rs 11.36 crore to Rs 44.13 crore. The advance portfolio of the bank as of March 31, 1997, was pegged at Rs 3,012 crore while the deposit base stood at Rs 5,398 crore during the same period. The bank paid a dividend of 18 per cent during the financial year 1996-97.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.