News Room

Press Release

Date: 19th February 2010

Initial Public Offering of 5,00,00,000 equity shares of face value of Rs. 10 each for cash at a price to be determined through a 100% Book Building process

Bid/Issue Opens on February 23, 2010 and closes on February 25, 2010

PRICE BAND: Rs 60 to Rs 66
Discount of Rs 3/- to Retail Individual Bidders and Eligible Employees

United Bank of India (the “Bank”), a public sector banking institution with branches in 28 States and in 4 Union Territories in India, intends to make an initial public offering (“IPO/ Issue”) of 5,00,00,000 equity shares of face value of Rs. 10 each (“Equity Shares”) for cash at a price to be determined through a 100% Book Building process(the “Issue”).

The IPO opens on February 23, 2010 (“Bid/ Issue Opening Date”), and closes on February 25, 2010. The IPO comprises of a net issue of 4,75,00,000 equity shares of face value of Rs.10 each to the public (“Net Issue”) and a reservation of 25,00,000 equity shares for subscription by eligible employees (the “Employee Reservation Portion”). The Issue shall constitute 15.80% of the post Issue paid-up capital and the Net Issue shall constitute 15.01% of the post-issue capital of the Bank.

This Issue has been graded by CARE as CARE IPO grade 4 indicating above average fundamentals and by ICRA as ICRA IPO grade 3 indicating average fundamentals.

The price band has been fixed at Rs 60 to Rs 66. A discount of Rs 3/- to the issue price determined pursuant to the completion of the Book Building Process has been offered to Retail Individual Bidders and Eligible Employees. The bids can be made for a minimum lot of 100 equity shares and in multiples of 100 equity shares thereafter for all categories of investors.

At least 60% of the Net Issue shall be allotted on a proportionate basis to Qualified Institutional Buyers (“QIB”). 5% of the QIB portion shall be available for allocation to Mutual Funds only and the remaining QIB portion shall be available for allocation to all the QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. If at least 60% of the Net Issue cannot be allotted to QIBs, then the entire application money shall be refunded. Further, not less than 10% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price net of retail discount. Further, upto 25,00,000 Equity Shares shall be available for allocation on a proportionate basis to Eligible Employees, subject to valid Bids being received at or above the Issue Price net of retail discount. Investors, except QIBs, may participate in this Issue through the Application Supported by Blocked Amount process by providing the details of their respective bank accounts in which the corresponding Bid Amounts will be blocked by the Self Certified Syndicate Banks (“SCSBs”).
 
The Book Running Lead Managers (“BRLMs”) to the Issue are SBI Capital Markets Limited, Edelweiss Capital Limited and Enam Securities Private Limited.
 
The Equity Shares offered by the Bank through the Issue are proposed to be listed on Bombay Stock Exchange Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”).

The Bank is currently a wholly-owned undertaking of the Government of India. Its business is principally divided into retail banking, corporate/ wholesale banking, priority sector banking, treasury operations and other banking services such as agency functions for insurance and mutual fund distribution, pension and tax collection services. Its retail banking business provides financial products and services to our retail customers. It provides loans and advances for housing, trade, automobiles, consumer durables, education, personal loans and other retail products. It has various deposit products, such as current, savings and term deposits for its customers. It provides commercial banking products and services to corporate customers, including mid-sized and small businesses and government entities. Its loan products include term loans to finance capital expenditure of assets across various industries as well as short-term loans, cash and export credit and other working capital financing and bill discounting facilities. It also provides credit substitutes, such as letter of credit and letter of guarantee. It offers direct financing to farmers for production and investment, as well as indirect financing for infrastructure development and credit to suppliers of agricultural inputs. In consonance with national policies and priorities, it has given considerable thrust to lending to the priority sector, including the agriculture sector. It also offers a wide range of general banking services to its customers including debit cards, cash management, remittance services and collection services. It distributes third party products such as life and non-life insurance policies and mutual funds on an agency basis. In addition, it acts as an agent for various state governments and the Government of India on numerous matters including the collection of taxes and payment of salary and pension. It delivers products and services through our branches, extension counters, ATMs, internet banking and telebanking.
 
Disclaimer:
United Bank of India (the “Bank”) is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offering of its equity shares and has filed a Red Herring Prospectus with the Designated Stock Exchange. The Red Herring Prospectus is available on the website of SEBI at www.sebi.gov.in and the websites of the Book Running Lead Managers at www.sbicaps.com, www.edelcap.com, and www.enam.com. Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, see the section titled “Risk Factors” on page no xii of the aforementioned Red Herring Prospectus.

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