However, considering the current market conditions when almost all the bank scrips (public as well as private sector banks) who had tapped the public in the past one and half years, are trading at a steep discount to their offer price, the prospects of SIB listing at a discount to the offer price appear bright. Also, another private sector bank, UTI Bank, is also likely to be listed on the stock exchanges in December.

The two private sector banks, City Union Bank and UTI Bank, are yet to give an exit opportunity to the investors. Both the banks, despite managing overwhelming public response, have failed evoke any support from investors after listing. Jammuand Kashmir Bank, despite a low level of NPA, hardly find buyers on bourses and after listing at Rs 31 on August 3, the scrip has been on a downward journey.

The scrip is currently trading at around Rs 24 against the offer price of Rs 38 (a loss of Rs 14 on each share). Even an impressive first-half show for the current fiscal failed to lift sentiments at this counter.

City Union Bank, which was listed in September, is now trading at around Rs 18 against the offer price of Rs 35. The loss to the investor (compared with the offer price) is Rs 17, that too in a matter of two months.

Both the banks, UTI Bank and South Indian Bank, may be poorly discounted on bourses. According to Maurice D' Souza, it is premature to predict the listing price at present, but SIB may be affected if the market conditions do not improve.

In fact, almost all the small banks with heavy regional concentration like Dena Bank, State Bank of Travancore, State Bank of Bikaner and Jaipur, City Union Bank and Jammu and Kashmir Bankhave not provided any capital appreciation to the investors. All these banks are now trading at a steep discount their offer price.

SIB had received overwhelming response from retail investors with the public portion (investors who had applied for less than 1,000 shares) oversubscribed by more than 3 times. The bank received applications from 34,000 investors for 1.63 crore shares and 1893 investors applied for more than 1000 shares aggregating 85 lakh. According SIB chairman, the bank is expected to report a net profit of around Rs 27 crore for the fiscal 1998-99 as projected. However, SIB could miss the profitability target if there is an increase in NPAs and provision for investments.

UTI Bank had offered 1.5 crore shares at a price of Rs 21 aggregating Rs 31.5 crore and offer for sale from UTI to the tune of 2 crore shares, aggregating Rs 42 crore.