United Bank of India logs tepid gains on debut

Settles at Rs 68.80 on BSE, a 3.93% premium over the IPO price

Shares of the state-run United Bank of India (UBI) settled at Rs 68.80 on BSE, a 3.93% premium over the initial public offer price of Rs 66.

The stock debuted at Rs 77, a 16.66% premium over its initial public offer price of Rs 66 per share. The stock hit a high of Rs 77 and low of Rs 68.10

The counter clocked volume of 2.82 crore shares on the BSE.

The state-run lender had priced initial public offer (IPO) at Rs 66 per share, at the upper end of the Rs 60-66 per share price band, raising Rs 324.98 crore. The bank offered the shares to retail investors and employees at 5% discount to the issue price.

The bank's IPO was subscribed 33.38 times and garnered bids for 166.88 crore shares as against 5 crore shares on offer. The bank's IPO remained open for bidding between 23 and 25 February 2010.

The UBI IPO saw high demand from institutional investors. The portion reserved for qualified institutional buyers (QIB) category was subscribed 47.08 times while that of non-institutional investors was subscribed 39.15 times. Retail investor portion was bid 9.80 times. However, employees quota remained undersubscribed and got bids for 13.25 lakh shares as against 25 lakh shares reserved for them

UBI has its presence predominantly in the north and north-east India. Following the IPO, the government's stake in the Kolkata-headquartered bank has declined to 84.20%, from 100%.

The bank would be utilising the IPO proceeds to expand its balance sheet and augment capital base