Master And Student - All About Stock Markets

United Bank of India, a PSU Bank is coming out with an IPO of 50 million shares of Rs.10 each at a price band of Rs.60- Rs.66. The bank has a well established network of about 1500 branches with 16,000 employees.
The bank is mainly into retail , corporate / wholesale, priority sector, treasury operations and other services such as agency functions for insurance and mutual fund distribution.

Details of the issue:

Issue Size: 50,000,000 Equity Shares of Rs. 10.
Face Value: Rs. 10 Per Equity Share.
Price Band: Rs. 60 - Rs. 66.
Issue Open: Feb 23, 2010 - Feb 25, 2010
Minimum Bid Quantity: 100 Shares.
Listing At: BSE, NSE.

The bank has made a very good improvement during the last five years of its operation. It is clearly one of the fastest growing banks in the industry.
The book value per share stands at Rs 94.75 and even at the higher end of the price band, the price to book value (P/BV) ratio stands at 0.7. Comparing with the other smaller PSU Banks such as Corporation Bank, Andhra Bank and Bank of Maharashtra, which are trading at a P/BV of 1.2, the IPO is clearly at a discount.

Also, the management has announced a discount of 5% for retail investors and hence long-term investors can subscribe to the issue.

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L&T Finance Limited has come out with Public Issue of Secured Redeemable Non- Convertible Debentures (NCDs) of face value of Rs.1,000 each aggregating to Rs.250 Crs with an option to retain over-subscription upto an additional Rs.250 Crs, aggregating to a total of Rs.500 Crs. The offer period is between 09th February 2010 to 22nd February 2010. The Debenture has been given
Credit Rating - AA+ by CARE and ICRA.

Details of the Isuue:

Face Value per NCD Rs. 1,000.
Minimum Application Size 10 NCDs for Retail category.
101 NCDs for QIB and NII categories.

There are 2 options:
I - Interest payment Semi-annual with a coupon rate of 8.40 % p.a.
II - Interest payment Annual with a coupon rate of 8.50% p.a.
Redemption Date / Maturity Period 36 months from the date of allotment.
The NCDs are to be listed in NSE and BSE.

Considering current bank Fixed Deposit rates of around 7%, this debenture is a better option to park some funds in it.

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A new stock exchange,United Stock Exchange of India, has been promoted by Bank of India, Canara Bank, Andhra Bank, Bank of Baroda, Allahabad Bank, Indian Overseas Bank and Oriental Bank of Commerce jointly with MMTC. Other shareholders include Standard Chartered Bank, Federal Bank, TCS and STCI.

This exchange is expected to come on line this month and is the fourth Currency Futures exchange after BSE, NSE and MCX-SX. For offloading the rest of the stake, the exchange is understood to be in talks with Chicago Mercantile Exchange, the world’s largest financial exchange.

Currently, volumes on the existing currency futures exchanges are just $0.5 billion which is 1/10th of the $50-billion volume on the over-the-counter currency forward market.The objective of this new exchange is to get different constituents of the market onto the currency platforms, and thereby increase participation. Currently, participation comes from the stock and commodity market players with many brokers, including banks, running proprietary books to increase currency volumes.

You can access the website at United Stock Exchange of India

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