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Feb 6 2007 12:00AM
Dhanalakshmi plans private placement
Dhanalakshmi Bank, the Kerala-based private bank, plans to privately placea little less than 5 per cent of its equity shares as part of its capitalraising plans that include a follow-on public issue to increase its networth to the minimum required by the Reserve Bank of India (RBI).The bank, 36.69 per cent owned by the Andhra Pradesh-based industrialist PRaja Mohan Rao, seeks to raise Rs 60 crore through a private placement andanother Rs 55 crore through a qualified institutional placement ((QIP).Currently, the bank has a net worth of Rs 119 crore.The bank would raise its net worth to more than Rs 300 crore. Whileapproximately Rs 115 crore is being raised through private placement andQIP, the remaining amount will be raised through a public issue later,said V S R Murthy,executive director. The bank will sell a little lessthan 5 per cent through private placement as selling anything above thatrequires RBI permission. The bank is in talks with four to five investorsat present, Murthy added.Dhanalakshmi Bank has been approached by venture capitalists, other banks,high net worth individuals and corporate groups as of now. However, Murthyclarified that the bank will sell its equity to small-sized corporategroups and not to the large ones.By the end of March 2007, the private placement procedure will becompleted, said Murthy. He further said the bank is also in talks withfour institutional investors for raising around Rs 55 crore through the QIProute, but declined to name the investors.The bank's capital adequacy ratio stood at 9.66 per cent in December 2006.After the raising the net-worth to Rs 300 crore, the capital adequacy ratiowill cross 12 per cent.The bank's gross deposits total Rs 2,600 crore and advances Rs 1,900 crore.Dhanalakshmi's gross non performing assets (NPAs) till 31 December 2006stood at 6.31 per cent and net NPA at 2.11 per cent. The bank aims tofurther bring down its gross NPAs to 5 per cent and net NPAs below 2 percent.|
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