IDBI Bank gets govt nod to raise Rs 3771 cr through QIP

by Anupama January 1, 2016 0 Comment

Government has given its go-ahead to IDBI Bank to raise Rs 3,771 crore during the year, by way of Qualified Institutional Placement (QIP), a move which will dilute its holding in the state-owned lender.

The government, according to the bank’s regulatory filing, has “conveyed its approval to IDBI Bank to raise capital to the tune of Rs 3,771 crore, through QIP route, at an appropriate time during the year”. It said the go-ahead for raising the fund was given to it through a letter yesterday.

At the current maket valuation Rs 3,771 crore represents about 26.45% share of IDBI Bank. The government holding in the bank stands at 80.16%. As per the existing norms, government equity in a public sector bank cannot go below 52% to maintain the public sector character of state-owned banks.

“The Public Sector Banks, including IDBI Bank have been allowed to raise capital from public markets through follow on public offer (FPO) or Qualified Institutional Placement (QIP) by diluting Government of India holding up to 52% in a phased manner based on their capital requirement, their stock performance, liquidity, market conditions…” the government had informed Parliament earlier this month.

Meanwhile the bank in another filing said it has raised Rs 1,000 crore today through bonds (Tier 2) on private placement basis to strengthen bank’s capital adequacy. “The entire issue has been subscribed by Employees’ Provident Fund Organisation,” it said. The bonds will be listed on NSE and BSE.

Read full article: Money Control

IDBI Bank gets govt nod to raise Rs 3771 cr through QIP

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IDBI Bank gets govt nod to raise Rs 3771 cr through QIP

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