Retail investors still fancy scrips like Corporation Bank, Bank of Baroda, ICICI Bank and Bank of India. These have provided handsome returns after their listing on the bourses. However, those who had invested in SBT, SBBJ and Dena Bank may have put themselves in a piquant situation as they are now desperately looking for an exit point. Since listing, these banks hardly crossed their offer prices. The poor discounting of these scrips is in spite of the fact that most of the banks have come out with impressive results for the first sixmonths of fiscal 1997-98.

Moreover, lack of institutional investor interest in these scrips has also contributed to the poor discounting. Importantly, the market may not view kindly their concentration in a particular region or state (as this may result in a limited exposure).

For instance, Kerala-based State Bank of Travancore has 655 branches and most of these branches are located in two southern states of Kerala and Tamil Nadu. Almost 78 per cent of the branches are in rural and semi-urban areas and the bank has a high non-performing assets ratio of 9.19 per cent as on March 31, 1997. The bank had offered 11.54 lakh equity shares of Rs 100 each at a price of Rs 600 in December 1997. The offer price was at 85 per cent of its bookvalue. SBT had come out with an impressive performance for the first six months of fiscal 1997-98 just before the opening of its issue. The bank had announced a 55 per cent jump in net profit to Rs 31.88 crore on a total income of Rs 501.97 crore (13 per cent). The issue wasoversubscribed by around 2.5 times. However, the euphoria was short-lived. The scrip which was listed in March 1998 at Rs 600 had been on a steep decline and touched its 52-week low of Rs 470. It never crossed the offer price and currently it is trading at 14 per cent discount to the offer price at Rs 516.

With 765 branches and 20 regional offices, SBBJ mainly operates in northern region, especially in Rajasthan. Nearly 70 per cent of these branches are located in rural and semi-urban areas and the bank has nearly 8 per cent NPA as on March 31, 1997. SBBJ had offered 12.21 lakh shares of Rs 100 each to the public at a price of Rs 540 in November 20, 1997. The bank had offered each share at 94 per cent of its book value. The bank reported a 74 per cent jump in net profit to Rs 42.81 crore on an operational income growth of 18 per cent to Rs 414.47 crore for the first-half of fiscal 1997-98. The public issue was preceded by the announcement of the results. The bank received an overwhelming response from thepublic with the issue subscribed by over 4 times. The new shares of SBBJ were listed in January close to its offer price and traded at a marginal premium for a few days. Since then, the scrip had been slipping continuosly and never crossed the offer price. Now the scrip is trading at 17 per cent discount to its offer price.

With 1134 branches under its fold (almost 60 per cent of them in rural and semi-urban areas), Dena Bank's operation is mainly concentrated in Gujarat, Maharashtra and Madhya Pradesh. The bank has a high NPA level of 11.9 per cent as on March 31, 1997. Dena Bank had offered 6 crore shares of Rs 10 each at a price of Rs 30. The offer price was 1.06 per cent of the book value at that time. The issue was oversubscribed. However, since its listing in January 1997, the bank share never touched its offer price of Rs 30. The scrip was listed at Rs 27 on January 20, 1997 and touched its 52-week high of Rs 28 in the following two trading sessions. Between September 1997 and April 1998, the scriphad been trading in the region of Rs 20-21. Now, the scrip is trading at a discount of 23 per cent to the offer price. Dena Bank has projected a lower growth rate of 10.3 per cent in advances for 1998-99 as against a growth rate of 26.2 per cent in 1997-98.