Punjab & Sind Bank IPO : Analysis

by khalid on 11/12/2010 · 2 comments

The only un-listed nationalized bank Punjab & Sind Bank is entering into primary market with an Initial Public Offer (IPO) of 40,000,000 Equity Shares of Rs 10 each. The IPO is opening on 13th Dec 2010 and the shares will be available for subscription up to 16th Dec 2010. The premium of the issue will be decided through a 100% Book Building Process. The price band for the issue has been fixed at Rs 113 – Rs 120 Per Equity Share . Punjab & Sind Bank founded in the year 1908 started functioning from the Holy City of Amritsar with a humble idea to uplift the poorest of poor. Now Punjab & Sind Bank is a major bank in Northern India. The bank has 930 branches spread throughout the country but around 50% of then are located in Punjab. The bank had a total business of around Rs 89000 crores as at the end of September 2010.

The objects of the IPO are to augment capital base to meet future capital requirement and general corporate purposes.

Company Financials:-
(Rs in Crores)

For the year ended 31-Mar-10For the year ended 31-Mar-09For the year ended 31-Mar-08For the year ended 31-Mar-07
Total Income4,326.303,630.712,528.431,919.38
Profit After Tax (PAT)506.82430.20402.13390.27

Risk Factors:-
1. In the next financial year FY12, RBI is going to allow more players to come in banking segment and then competition will be more tough.
2. Punjab & Sind Bank is not present in whole India and most of the progressive states like Maharashtra, Karnataka, Andhra have very likited representations.

Positive Factors:-
1. IPO grade 4 by CARE. So its an ‘Above Average Fundamentals’ and that is good.
2. The average business per employee is Rs 9.63 crores and it is far better than the industry average of Rs 8.70 crores.
3. Price band is Rs 113-120/share and looks attractive.

Valuation and Recommendation :-
Punjab & Sind Bank is the only un-listed nationalized bank. At Rs 113-120/share, the company is demanding a valuation around 5 times on its FY11 earnings, which is attractive. This bank’s working culture is different than other listed public sector banks. Previous banks IPOs like UBI, SBI or Indian Bank have given a good return to the investors and hopefully this IPO too will give a nice return. So go for it and ‘APPLY’ for subscription.

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{ 2 comments… read them below or add one }

vasanth ramalingam January 21, 2011

My Application no is :11858303.I have applied for IPO.I have not got my money back.I have intimated given my comment before.I have not got any responds from ur side.It has been very long. Please let us know, when i will get my money back

Reply

khalid January 21, 2011

Hi Vasanth,

Sorry to know that your money got stucked but this is not the right place to complain. You lodge your complain to the registrar of the issue…..
Link Intime India Private Ltd, Mumbai.

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