BoR to sell 14.75 pc stake

Bank of Rajasthan (BoR) is seeking to privately place 14.75 per cent of its equity at 1.5 times the current market price. About five foreign...

Bank of Rajasthan (BoR) is seeking to privately place 14.75 per cent of its equity at 1.5 times the current market price. About five foreign private equity funds/banks are believed to be conducting due diligence on the bank.

Post the private placement, which is expected to be completed by next month, the stakeholding of the promoter group led by Pravin Kumar Tayal, chairman of the bank, will be diluted to around 38%.

“We are looking at a price of around Rs 100 for the private placement. After the private placement of equity, the bank’s paid up capital will go up by Rs 15.5 crore to Rs 123 crore. Further, this will also lead to funds’ infusion of anywhere between Rs 150-160 crore,” said Tayal.

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“Our bank needs capital for growing its assets as also for complying with Basel-II norms on capital adequacy. Post the private placement, our capital adequacy ratio will go up to 18.5 per cent from 15.5 per cent now,” explained Tayal.

Investment bank Edelweiss is the adviser for the private placement of BoR’s shares of Bank of Rajasthan.

Once BoR signs a Memorandum of Understanding (MoU) with a foreign private equity fund/ bank, the MoU will be taken up for approval by the board of directors and the regulator’s clearance will be sought. Further an extraordinary general meeting (EGM) of shareholders will be convened to give the final seal of approval.