UCO Bank to go for FPO

UCO BankAfter three years, when the Indian public sector bank, UCO Bank came up with its IPO; it is ready again to sell its stake in the market. After getting approval from its board, the bank is all set to come up with Follow-on Public offer (FPO). It is going sell 60 million shares in the market.

SK Goel, Chairman, UCO Bank said, "The bank will come out with an FPO of six crore shares by March-end and will offer a discount to retail investors." The bank expects to raise close to Rs. 400 crore through this FPO.

With the issue, the public sector bank will be able to get the much needed cash to keep itself floating in the market. However, experts believe that because of this move, the cash adequacy ratio of the bank will come under stress.

Besides, keeping in mind the current prices and the downturn that the capital markets are going through, experts also believe that UCO Bank will not be able to raise Rs. 400 crore but something lesser than that.

The bank has already got a nod from the government for going ahead with the FPO.