Syndicate Bank to raise up to Rs. 1,000 crore

Syndicate Bank is looking to raise Rs. 500 crore to Rs. 1,000 crore by the end of the last quarter of this financial year through either a rights issue or tier-one bond issue.

The bank has a capital adequacy ratio of about 12 per cent. The management is planning to have some growth capital too.

The bank proposes to raise Rs. 400 crore to Rs. 500 crore under the employee share purchase scheme. The shares will be issued at a discount of 20 to 25 per cent of the average market price. Good performers would get a little more discount with the bank’s innovative structuring.

The bank was expecting 4.5 per cent credit growth this fiscal. The first half of the current fiscal was not good. The bank has degrown, with three continuous quarters of losses due to provisioning requirement.

With regard to agriculture NPAs, there was some pressure as some governments had announced a loan waiver. The bank’s net agriculture NPAs is 6 per cent. The management expects total NPA recovery of Rs. 3,000 crore for the whole year.

On Monday, the stock of Syndicate Bank opened at Rs 35.60 per share and touched a HIGH/LOW of 36/35.25 per share.