 Dear Investor,By now you might be aware that UCO Bank is going to launch its Initial Public
Offering (IPO) of equity shares. I take this opportunity to apprise you of some of the
salient features of our Bank and the offering:
The IPO is proposed to be for 20,00,00,000 equity shares
of face value of Rs.10/- each at a premium of Rs.2/- per share. The issue is hitting the
market in the first week of September 2003.
I highlight below some of the positives of this 60-year
old Bank:
- The Bank has demonstrated an impressive track record of
consistent profits over the last four years. For the year ended 31st March 2003, the Bank
posted a net profit of Rs.243.60 crore, a CAGR of 45.8% over the last 3 years. The Bank
has also paid its maiden dividend to the Govt. of India this year.
 The Bank is firmly on a superior growth path, with total business
recording a 20.24% growth in FY'03. Leveraging effectively its franchise value and
nationwide reach through a network of 1705 branches, the bank could achieve a deposit
growth of 16.74% and advance growth of 27.48% in the last fiscal.
- The Bank already has a healthy capital adequacy ratio of
10.04% as on 31st March 2003, as against a minimum benchmark of 9% prescribed by RBI.
- The Bank's net NPA ratio has progressively come down from
6.35% in FY '01 to 4.36% FY '03, largely as a result of aggressive provisioning and
recovery drives.
- As part of large scale IT initiative, 684 major branches
have been computerised covering 75% of the Bank's total business. The Bank is focussed on
customer convenience by boosting ATM connectivity and introducing Single Window Service.
- The Bank has an integrated treasury operations branch in
Mumbai covering forex, debt & money markets. The Bank has also set up Depository
Participant services at Mumbai in collaboration with NSDL to facilitate stocks and
securities transaction for our valued customers.
- As a measure of strengthening the bouquet of financial
services, the Bank has entered into a Memorandum of Understanding (MOU) with the National
Insurance Company Ltd. for acting as corporate agent for selling their Non-life products.
UCO Bank has achieved earnings per share of Rs.4.06 and
net asset value per share of Rs.15.18 for the financial year ended 31st March, 2003. At
Rs.12/- per share. The  issue is attractively
priced with a P/E multiple of 2.96 and a P/BV multiple of 0.66 (pre-issue) and 0.83
(post-issue).
With the above credentials and strong fundamentals of the
Bank, I am confident that you will find the IPO of UCO Bank an attractive investment
proposition. May I, therefore, on behalf of the Bank, request you to kindly take personal
interest for a substantial investment in this maiden public equity offering of UCO Bank.
With warm regards,
Yours truly,
(V P Shetty)
Chairman and
Managing Director |
