Punjab and Sind Bank : SUBSCRIBE IPO Fairly Valued

Price Band- Rs.113-120, Face Value- Rs.10, Discount to Retailers – 5%. Issue opens on- 13th December 2010, Monday
Issue closes on- 16th December 2010, Thursday
Listing on – th 2010, Lot Size - 50 
QIB Book- 1,90,00,000 shares.
Retail Book – 1,33,00,000 shares.
Employee Reservation- 20,00,000 shares
Total No. of Shares offered- 4,00,00,000 shares.
Equity Shares outstanding prior the Issue- 18,30,56,000 Sh
Equity Shares outstanding after Issue- 22,30,56,000 Sh
Total Size of the Issue- Rs.452 Crs. - Rs. 480 Crs.

FINANCIAL DETAILS AS ON – 31st March 2010
TOTAL ASSET – Rs.56099.58 cr
TOTAL INCOME - Rs. 4326.30 cr
NET PROFIT – Rs. 501.13 cr
NETWORTH – Rs.2106.58 cr
Equity Share Capital – Rs. 183.06 cr
Preference Share Capital – Rs.200 cr
Reserves & Surplus – Rs. 1723.52 cr
Earning Per Share – Rs. 26.70/sh.
Book Value – Rs. 104.15/sh.
FINANCIAL DETAILS UPTO – 30th September 2010
TOTAL ASSET – Rs.58343.02 cr
TOTAL INCOME - Rs. 2522.95 cr
NET PROFIT – Rs. 276.38 cr
NETWORTH – Rs.2382.07 cr
Equity Share Capital – Rs. 183.06 cr
Preference Share Capital – Rs.200 cr
Reserves & Surplus – Rs. 1999.01 cr
Earning Per Share – Rs. 15.10/sh.
Book Value – Rs. 119.20/sh.

PUNJAB AND SIND BANK
Punjab and Sind Bank, began its business in 1895, is the smallest of the state-run banks in terms of business. This Bank has its traces way back to the Swadeshi movement against the British, started with a capital of Rs200,000, working capital of Rs20,000 and a staff of 9 whom it paid a total monthly salary of Rs. 320, Is coming with an IPO to offer about 4 cr shares. the price band is declared at Rs. 113 - Rs.120 which according to me fairly valued in comparision of its peers. I expect Punjab and Sind Bank should grow at above 20%, at the end of the last fiscal in March, the bank had total deposits of Rs. 52,945.09 crore and advances of Rs. 35,859.97 crore. It had 926 branches as of 31 October.Bank’s Gross NPAs were Rs. 206.15 crore as of March 31, 2010, representing 0.63% of its gross advances and 0.36% of its total assets.
State-run banks have performed well over the years in the face of competition from aggressive rivals in the private sector and from foreign banks. Government-owned banks control 70% of India’s banking industry, foreign banks just around 7% and the rest is held by private sector banks.

SOME PEER COMPARISIONs
Punjab & Sind Bank - Face Value – Rs.10 ; Book Value – Rs. 104.15 ; EPS – Rs. 26.70 ; Price/Earning – 4.23 to 4.49  ; Price/Book Value –  1.08 to 1.15

Andhra Bank - Face Value – Rs.10 ; Book Value – Rs. 90.93 ; EPS – Rs.23.49 ; Price/Earning – 6.26 ; Price/Book Value – 1.62

Bank of Maharashtra - Face Value – Rs.10 ; Book Value – Rs. 55.84 ; EPS – Rs.9.80 ; Price/Earning – 6.64 ; Price/Book Value – 1.13

Corporation Bank - Face Value – Rs.10 ; Book Value – Rs. 402.60 ; EPS – Rs.90.83 ; Price/Earning – 6.85 ; Price/Book Value – 1.55

Dena Bank - Face Value – Rs.10 ; Book Value – Rs. 83.43 ; EPS – Rs.19.91 ; Price/Earning – 6.02 ; Price/Book Value – 1.44

United Bank of India - Face Value – Rs.10 ; Book Value – Rs. 91.61 ; EPS – Rs.12.19 ; Price/Earning – 8.70 ; Price/Book Value – 1.16

Vijaya Bank - Face Value – Rs.10 ; Book Value – Rs. 61.44 ; EPS – Rs.13.22 ; Price/Earning – 7.09 ; Price/Book Value – 1.53.

SO, I give a SUBSCRIBE/BUY rating to the PUNJAB & SIND BANK with the listing gains and expect to trade near 1.40 x times the book value. Rs. 146 to Rs. 170