Shares of state-owned Punjab National Bank (PNB) dropped more than 2.50% on Monday, reaching an intraday low of Rs 108.51 after the bank set a floor price of Rs 109.16 per share for its qualified institutional placement (QIP) offering.
Details of Share Sale Plan
PNB had previously obtained board approval to raise up to Rs 7,500 crore through share sales in one or more tranches during the financial year 2024-25. The board has now approved the preliminary placement document, including the application form for the issue, the bank announced in a regulatory filing.
The floor price of Rs 109.16 per share was set based on the pricing formula outlined under Regulation 176 of the Sebi ICDR Regulations. The bank also stated that it may offer a discount of up to 5% on the floor price, depending on market conditions.
Price Determination and Process
The final issue price will be determined in consultation with the book running lead managers appointed for the issue. The QIP is aimed at bolstering PNB’s capital base as the bank looks to raise funds in the current fiscal year.
The announcement has impacted the stock, leading to a decline as investors react to the news of the floor price and potential dilution from the share sale.
Stock Performance in Last One Year
In terms of stock performance, Punjab National Bank faced a mixed bag of results. Over the last month, the stock attempted to secure negative returns of 6.12%. Meanwhile, the past six months were more challenging, with the stock experiencing negative returns of 12.73%.
Year-to-date returns remained in positive territory, yielding 13.95%. However, over the last twelve months, the stock delivered positive returns of 40.84%, highlighting its resilience in the longer term.
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