Development Credit Bank promoted by AKFED makes strong debut

DCB makes strong debut

Mumbai, Oct. 27: Development Credit Bank Ltd (DCB), the private sector bank promoted by Switzerland-based Aga Khan Fund for Economic Development (AKFED), today made a strong debut on the stock exchanges.

DCB opened at Rs 35.35 on the BSE against the issue price of Rs 26 per share, a 36 per cent premium. It later ended at Rs 47.30, gaining around 82 per cent.

The DCB scrip hit an intra-day high of Rs 48.65 at the BSE, while it rose to a peak of Rs 48.70 on the NSE. The share ended at Rs 47.35. The counter saw a combined volume of 13.8 crore shares on both the exchanges.

The DCB issue, which opened for subscription on September 29 and closed on October 6, was oversubscribed 35.68 times. The qualified institutional buyers’ portion was oversubscribed 38 times, the high net worth individuals’ portion 84 times and the retail portion 15 times.

The issue will help the Bank strengthen its capital base and also help it meet the capital adequacy norms required by Basel II and recommended by the Reserve Bank of India. DCB had entered the capital market with an initial public offer of 71,500,000 equity shares amounting to Rs 186 crore.

The issue comprised a reservation of 2,502,500 equity shares for eligible employees and the 68,997,500 equity shares were for the public. The offer constituted 48.43 per cent of the post issue paid up capital of the company. The bank had fixed a price band of between Rs 22-26 per share for the offering.

After the successful listing on the bourses today, senior bank officials said that while DCB is now planning an expansion in various parts of the country, the focus is more on garnering retail deposits. On the other hand, the net interest margins (NIMs) are expected to be higher in the coming months as DCB has a strong franchise on the small and medium enterprises (SME) front where yields are much higher.

Author: ismailimail

Independent, civil society media featuring Ismaili Muslim community, inter and intra faith endeavors, achievements and humanitarian works.

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