MAX. ISSUE SIZE (Rs) : 816 crores
PRICE BAND (Rs) : 85 - 105
ISSUE OPENS/CLOSES : 24th July 2007 to 27th July, 2007
LISTING : NSE, BSE.
Sorabji Pochkanawala, the pioneer of Indian banking was one of the founder fathers of this bank. Sadly, his legacy does not seem to have inspired this bank in more recent times. Possibly the last to benefit from the ‘great Indian PSU banking trick’ of extinguishing accumulated losses against capital, Central Bank wrote off approximately Rs.680 crore of accumulated losses against capital in March 2002. What’s more, as recently as this March, it ‘restructured’ its capital base of Rs 1,124 crore to include a perpetual preference share component of Rs.800 crore.
Its topline has grown at a CAGR of 7 per cent over the past three years while its bottomline has fluctuated. In fact, over the last three years, it has actually declined from Rs.620 crore to Rs.504 crore. With computerization, now a ‘buzz word’ even among some PSU banks, seeming to have given Central Bank a miss, barely one third of its business is covered under CBS.
A study of its Balance Sheet indicates its asset composition being tilted heavily towards lower yielding corporate and commercial loans. Adding to this concern is the net NPA level of 2.6 per cent which is a throw-back to those darker banking days of the past.
Notwithstanding the modest financials, the reduced equity base positively impacts the EPS, which exceeds Rs.13 for FY07. At a P/E multiple of 8 though, the bank is in the same range as proven peers of comparable size like Corporation Bank and Canara Bank.
Given this scenario, it can hardly be surprising if discerning investors steer clear of this issue and back some of its other listed peers, who are better positioned to ride the expected banking upsurge, on the back of the ‘India growth story’.
Its topline has grown at a CAGR of 7 per cent over the past three years while its bottomline has fluctuated. In fact, over the last three years, it has actually declined from Rs.620 crore to Rs.504 crore. With computerization, now a ‘buzz word’ even among some PSU banks, seeming to have given Central Bank a miss, barely one third of its business is covered under CBS.
A study of its Balance Sheet indicates its asset composition being tilted heavily towards lower yielding corporate and commercial loans. Adding to this concern is the net NPA level of 2.6 per cent which is a throw-back to those darker banking days of the past.
Notwithstanding the modest financials, the reduced equity base positively impacts the EPS, which exceeds Rs.13 for FY07. At a P/E multiple of 8 though, the bank is in the same range as proven peers of comparable size like Corporation Bank and Canara Bank.
Given this scenario, it can hardly be surprising if discerning investors steer clear of this issue and back some of its other listed peers, who are better positioned to ride the expected banking upsurge, on the back of the ‘India growth story’.
