By Thushantha JayathilakaUnion Bank's Initial Public Offering (IPO) will be opened for subscription officially from today. Daily Mirror Business learnt the issue is well accepted, as the Registrars to the offer have already received a large number of bank guarantees.
Sources revealed that the issue received bank guarantees worth 300 times the size of the issue, and about 100 bank guarantees have been received to fully subscribe it.
Union Bank in its Rs.375 million IPO, offers 15 million shares to the public. Out of the 15 million, 1.5 million will be offered to employees, while another 2.25 million will be to bank's customers who have been maintaining accounts with the bank for a minimum of six months as at January 31, 2011. Thus, only 11.25 million will be offered to the public.
The issue is scheduled to close on March 16 or the day on which the issue is oversubscribed.
According to an analyst, it is hard to guess the number of times the issue will be oversubscribed, with such large bank guarantees.
A recent research report published by Asha Phillip Securities Ltd states that Union Bank's upcoming IPO is a good buy for prospective investors.
The research report states the bank possesses a strong balance sheet amounting to Rs. 18.6 billion and a capital adequacy ratio of 28.97%, despite a credit growth of 27% in 2010.
source - www.dailymirror.lk
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