Bank of Punjab is in talks with a few strategic investors, including NewBridge Capital and Citibank, for a possible placement of up to 49 per cent of its equity through the preferential route.
Bank of Punjab Chairman Darshanjeet Singh, however, refused to reveal the entities the bank was in discussions with.
"The bank has maintained that it is open to the idea of placing stakes with strategic investors. Foreign institutional investors are also welcome. We are looking at enhancing our shareholder value," he said.
Singh pointed out that Bank of Punjab was keener on a strategic investor.
"We are ready to offer up to the maximum limit permissible under the current norms. The promoters are ready to dilute their stake, depending on the type of investors."
Singh stressed that the promoters were not looking at selling out at the moment.
A Citibank official said, "It is Citigroup's policy not to comment on market rumours and speculation."
The current regulations permit a foreign bank to pick up to a 49 per cent stake in a domestic bank through the foreign direct investment route.
Besides, foreign institutional investors are allowed to hold another 49 per cent in a private bank.
NewBridge has also been in talks with Global Trust Bank. Apart from NewBridge, Global Trust Bank has been negotiating with Development Bank of Singapore for a possible stake sale.
The Bank of Punjab scrip has been rising on the bourses in the last few days. The trade volume has also increased manifold.
The scrip, which was at Rs 24.75 on December 1, on Monday closed at Rs 34.50 on the Bombay Stock Exchange, climbing 39.39 per cent in a week. The promoters hold 36.25 per cent in Bank of Punjab.
The bank has around 119 branches and 150 ATMs across the country. It has a strong presence in the north, especially in Punjab, Haryana, Delhi and parts of Rajasthan, Madhya Pradesh and Gujarat. The bank has a balance sheet size of around Rs 4,537 crore (Rs 45.37 billion).
Bank of Punjab was earlier in talks with HDFC Bank. However, the bank's promoters have denied that they are looking at exiting it.
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