Four banks, UCO Bank, Indian Overseas Bank, Vijaya Bank and IDBI Bank, will hit the market over the next two months to mop up over Rs 650 crore (Rs 6.50 billion).

The Kolkata-based UCO is floating an initial public offer, IDBI Bank is coming out with a rights issue, while the other two public sector banks have lined up their second public issue.

UCO will offload 20 crore (Rs 200 million) equity shares at a face value of Rs 10, which may carry a premium of Rs 2.

IOB is planning to offer 10 crore (Rs 100 million) shares to the public, its second tranche of public issue.

The bank is looking at a premium of Rs 10-14, taking the issue size to Rs 200-240 crore (Rs 2-2.4 billion).

It will use the additional proceeds to augment long-term resources and also to maintain a comfortable capital adequacy ratio.

The issue will take the bank's capital to Rs 544.80 crore (Rs 5.448 billion). The government's stake, which currently is at 75 per cent, will come down to 61.23 per cent after the issue.

Besides SBI Capital Markets, the other lead managers to the issue are DSP Merrill Lynch, Kotak Mahindra Capital Company, A K Capital Services and Allianz Securities.

Vijaya Bank too is planning its second issue of Rs 100 crore (Rs 1 billion). DSP Merrill Lynch, J M Morgan Stanley, SBI Caps, A K Capital and Alliance Capital have been appointed as merchant bankers.

The government's holding after the public issue will be reduced to 51 per cent from the current 70.02 per cent. The issue is likely to hit the market next month.

IDBI Bank plans to raise Rs 154 crore (Rs 1.54 billion) through a rights issue before September 30.

The issue, which will be in a ratio of 1:2, is being priced at Rs 22 a share. IDBI Bank will issue 7 crore (70 million) shares through the issue, an IDBI source said.

Post-issue, the share capital, which stands at Rs 140 crore (Rs 1.40 billion), will increase to Rs 210 crore (Rs 2.10 billion).

The market will also see a flurry of rights issue over the next few months. The list of rights issues includes Bajaj Electricals and Noida Toll Bridge.

The new development of banks entering the market also pushes into background the plan to return government equity at a par.

Some banks were planning that to push up their book value and earning for shares. Instead, banks are now tapping to market to raise fresh equity.