Business India

Indian Bank to appoint merchant banker to dilute govt stake

State-run Indian Bank is in the process of appointing a merchant banker to initiate the process of diluting the government’s holding, an official said on Tuesday.

To conform with SEBI regulations, the bank is required to bring down government holding to 75 per cent from 82 per cent by March 2019.

“We are in the process of appointing a merchant banker for the purpose. The bank will take suggestions from the merchant banker,” Indian Bank’s Managing Director and CEO Kishor Kharat said here on the sidelines of an event organised by the Merchants’ Chamber of Commerce and Industry.

He, however, did not give details of options through which it will dilute the government’s stake.

He said the lender is adequately capitalised but it may have to raise capital to dilute government’s stake by around seven per cent.

“We are looking for the right opportunity,” Kharat said, adding that the bank’s capital adequacy ratio currently stood at 13.58 per cent.

The bank is targeting to achieve 12-14 per cent growth in business by the end of the current fiscal, he said.

The lender has reduced its exposure to the power sector in the first quarter of the current fiscal.

“Going forward, such a trend will continue. We will go for renewable energy and low cost energy segment. The renewable energy sector is growing and its cost is also coming down. State and centre are trying to bring down the PPA (power purchase agreement) cost,” Kharat said.

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