Indian Bank to raise up to Rs 7,000 crore through QIP

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New Delhi | Published: May 31, 2019 2:02:20 AM

indian bank, banking sector, banking industryIndian Bank’s capital adequacy ratio was 13.21% at the end of March 2019, up from 12.55% in March 2018.

Chennai-based Indian Bank has sought bids from merchant bankers to run the process for its equity fund-raise worth up to Rs 7,000 crore through a follow-on public offer (FPO) or a qualified institutional placement (QIP) of shares.

“Indian Bank intends to tap capital markets via a FPO / QIP route for raising of capital up to Rs 7,000 crore (including premium) in one or more tranches of face value of Rs 10 each. We invite proposals from interested merchant bankers, registered as such with the Securities and Exchange Board of India (Sebi) independently and not in consortium, having a valid certificate with experience and expertise in handling capital market issues, including initial public offer (IPO), FPO and QIP and investment banking in the Indian banking sector and fulfilling eligibility criteria, to assist and advise the bank in the FPO/QIP process,” the lender said in its request for proposal (RFP) on Thursday.

Indian Bank will select and appoint up to five merchant bankers with requisite experience who together will be designated as book running lead managers (BRLMs).

The last date for interested parties to submit their bids is June 12, following which presentations will be made by bidders on June 17.

Indian Bank’s capital adequacy ratio was 13.21% at the end of March 2019, up from 12.55% in March 2018. Its loan book stood at Rs 1.88 lakh crore at the end of FY19, up 15% year-on-year (y-o-y). Its shares ended at Rs 282.20 on the BSE on Thursday, 2.36% higher than their previous close.

FY20 could see a fair amount of fund-raising activity by public-sector banks (PSBs). State Bank of India (SBI) is expected to hit the market to raise up to Rs 20,000 crore through sale of shares. Punjab National Bank (PNB) and Allahabad Bank have also announced plans to raise money through a number of routes, including QIP.

Banks are tapping the markets at a time when credit has been growing at 12-13% y-o-y, even as deposit growth lags.

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