QIP is a tool used by listed companies to sell shares, debentures, or any other security, other than warrants that are convertible into stocks, to qualified institutional buyers such as mutual funds and foreign institutions.
Private sector lender RBL Bank has raised Rs 2,025 crore from 40 investors, including non-banking lender Bajaj Finance, to bolster its capital base. The bank’s performance has been under pressure in the past few quarters due to its exposures to a few stressed accounts. The fund was raised through institutional placement at Rs 351 a share, the bank said in a statement on Friday.
Bajaj Finance, which has had a partnership with RBL to sell co-branded credit cards, has invested Rs 150 crore to get a 0.87 percent stake, and is among the largest investors in the issue. The Pune-based group’s life cover venture Bajaj Allianz Life has also invested for a 0.65 percent stake. The issue involved sale of 5.77 crore shares and the price, which is a discount to the current price, was arrived at using prescribed formula.
Its overall capital adequacy will move up to 15.3 percent with the core tier-I buffer at 14.3 percent, as against 12.3 percent and 11.3 percent, respectively, in September, the bank said. Giving a break-up of the investors, it said 10 of the 40 investors are new, and that 60 percent of the money has been raised from domestic mutual funds and insurance companies while the rest from foreign investors from Asia and Europe.
Other investors include Abakkus Growth Fund, Aditya Birla Sun Life, Axis Mutual Fund, BNP Paribas Cap Fund, Edelweiss Alpha Fund and HDFC Trustee Company, among others. “This capital infusion significantly enhances our capital adequacy, and positions us well to capitalise on the various growth opportunities available to us, especially as economic growth returns to normal,” RBL managing director Vishwavir Ahuja said.
The bank had posted a 73 percent plunge in the September quarter net at Rs 54 crore. The RBL counter closed at Rs 338.80, down 7.3 percent, on the BSE as against a 0.82 percent correction on the benchmark.