MUMBAI, NOV 5: Indusind Bank Ltd, the new private sector bank promoted by a group of investors led by the Hinduja group, is entering the capital market on November 25 with an equity issue of 4 crore shares of Rs 10 each at a premium of Rs 35 per share aggregating Rs 180 crore to fulfill the Reserve Bank of India (RBI) conditions and list the shares on the stock exchanges in the country.

The bank which started operations in 1994 has 20 computerised branches. While it has a deposit base of Rs 3,093.10 crore and advances of Rs 1,927 as of March 31, 1997, about 86.98 per cent of the total deposits are time deposits (Rs 2,854.62 crore). The savings bank deposit which provide cheap funds to banks is a meagre 0.82 per cent of total deposits.

As on March 31, 1997, the bank had as an earning per share of Rs 6.11 and net asset value of Rs 23.29. It has also achieved a capital adequacy ratio of Rs 12.90 per cent has marked 100 per cent of its investments. During 1996-97, it recorded a net profit of Rs 73.32 crore and Rs 29.46 crore during the first four months of 1997-98.

The bank has made provisions for Rs 30.50 crore for the loss it suffered due to defaults by the CRB group of companies, according managing director, S Solomon Raj. The bank has made full provision towards its exposure to the CRB group in its audited results for the period ending July 31, 1997.

``At the time when the CRB companies approached the bank, their financial position was good, hence we had an exposure to them,'' Raj said at a press conference here today.

According to the bank's offer document for its initial public offering (IPO), the IBL does not have any exposure to CRB Capital Markets Limited, but has exposure only to companies associated directly or indirectly to the CRB capital markets. ``The exposure is fully secured by way of a charge on the current assets as well as plant and machinery and all the charges have been duly registered with the registrar of companies,'' the offer document has said.

The document added that the bank had initiated legal action to recover its dues. The provisioning has been made irrespective of the availability of charge on the assets of the borrowing company. As on July 31, the bank has a net non-performing assets (NPA) to advances ratio of 2.13 per cent and has a net NPAs of Rs 44.40 crore.

The shares will be listed on the stock exchanges in Mumbai, Pune and the National Stock Exchange.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.