Dena Bank to raise Rs 600 crore through QIP

Written By Unknown on Senin, 11 November 2013 | 08.11

State-run lender Dena Bank is planning to raise Rs 600 crore through qualified institutional placement (QIP) after it receives capital from the government, which is expected to happen by December-end.

"We expect Rs 700 crore by way of capital infusion for which we will be issuing preferential shares to the government," Bank's chairman and managing director Ashwani Kumar said.

Also Read: SBI gets govt nod to raise Rs 9,000cr via QIP route

"Government's share in our bank is 55.25% and maintaining the government share at the same level, we will raise QIPs which should be around Rs 600 crore, depending on the price we will get."

The bank's current capital adequacy ratio is 10.21%. Financial Services Secretary Rajiv Takru had said banks would be allowed to raise capital from the markets in the proportionate amount infused by the government to maintain the government's shareholding.

The Finance Ministry had last month cleared the Rs 14,000 crore capital infusion plan for the public sector banks to improve their capital base. The infusion will ensure that banks have 8% Tier-1 capital by the end of the current fiscal year.

The government had infused Rs 20,117 crore and 12,000 crore in public sector banks during 2010-11 and 2011-12, respectively. Dena Bank reported a 55.19% decline in its net profit at Rs 107.38 crore for the quarter ended September 30, 2013, on account of higher provisions. The bank's deposits increased by 12% to Rs 93,669 crore in the quarter. Total advances in the quarter grew by 11% to Rs 65,664 crore.


Dena Bank stock price

On November 08, 2013, Dena Bank closed at Rs 59.55, up Rs 0.60, or 1.02 percent. The 52-week high of the share was Rs 128.00 and the 52-week low was Rs 41.85.


The company's trailing 12-month (TTM) EPS was at Rs 21.74 per share as per the quarter ended June 2013. The stock's price-to-earnings (P/E) ratio was 2.74. The latest book value of the company is Rs 164.66 per share. At current value, the price-to-book value of the company is 0.36.


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