SHCIL plans IPO, new bank

SHCIL plans IPO, new bank
ENS ECONOMIC BUREAU

MARCH 3: India's leading depository participant Stock Holding Corporation of India Ltd (SHCIL) will make an initial public offering (IPO) in the third quarter of 2000. "The SHCIL will come out with an initial public offering in the third quarter of this calendar year to fund its future plans," SHCIL managing director and chief executive officer B V Goud said.

The date of the issue, premium and size of the IPO will be discussed at SHCIL's board meeting later in March. Goud said the board will also consider setting up a subsidiary for Internet trading.

SHCIL is planning to set up a specialised bank to cater to the financial needs of capital markets. The bank would cater to needs like working capital requirements of stock brokers and act as a clearing bank for stock exchanges, Goud said.

SHCIL has applied to the Reserve Bank of India for permission to set up the bank, it added. He said under the existing Banking Regulation Act, there is no category like limited purpose bank.

After the CRB scandal, RBI had cancelled all the applications filed with it for setting up a bank and since then no fresh applications have been invited by the central bank.

In April 1997, Bombay Stock Exchange (BSE) had a similar proposal for setting up a bank to meet the need of its members. "SHCIL proposal is totally different from other cases," Goud said, adding the proposed bank would cater to the various needs of the capital markets like working capital of stock brokers and acting as clearing bank for stock exchanges.

The net worth of the company has also crossed the Rs 100 crore mark, the minimum capital required for setting up a bank, stipulated by RBI when the earlier banking licences were issued, Goud said.