Announcing this to newspersons here on Wednesday, the bank's chairman, MY Khan, said that the present issue would enable the bank to increase its exposure limit for industrial advances as per the prudential norms. The bank expects to post a growth of about 25 per cent per annum in total business in the next few years to come, resulting in substantial increase in the risk-weighted assets of the bank for which the bank proposes to augment its networth in order to sustain a healthy capital adequacy ratio. At present, the bank has a high capital adequacy ratio of 15.88 per cent.

Khan said that after having consolidated the branch network and their productivity, the bank is contemplating branch expansion on a large scale. Currently, it has anetwork of over 360 offices spread across 15 states and two Union territories, with a large presence in Jammu & Kashmir and Delhi. The bank has already applied to the Reserve Bank of India (RBI) for grant of permission to open 56 additional branches. The RBI has already granted permission to open 10 branches in J&K, Punjab and Mumbai. "We want to enter project financing by participating in large infrastructure projects," he added.

Khan said that as per the unaudited financial results for 1997-98, the bank has doubled its net profit to Rs 50.15 crore. The bank's deposits grew by 32 per cent to Rs 4,856 crore and advances by 27.5 per cent to Rs 2,158 crore. The net non-performing assets (NPAS) of the bank stood at 6.02 per cent as on March 31, 1997, and would fall to just over four per cent as on March 31, 1998.

He said that the significant point in the pricing of the bank's share is that it is being offered at a price to book value (P/BV) ratio of 0.50 and 0.62 on the pre-issue and post-issue capitalrespectively.