Stock of Indian Bank rises in early trade as it launches a Rs 4,000 crore QIP

13 Dec 2023 , 01:07 PM

On December 13, Indian Bank shares began trading higher after the public sector lender announced the beginning of its qualified institutional placement (QIP), which aimed to raise up to Rs 4,000 crore. The floor price for the issuance has been fixed at Rs 414.44 per share by the bank’s board.

On December 15, the bank’s Committee of Directors (Capital Raising) will convene to discuss and approve the equity share issue price that will be distributed to eligible institutional purchasers.

Indian Bank shares were down 1.1% at Rs 432.70 on the National Stock Exchange (NSE) at 12:16 p.m.

A basic issue amount of Rs 2,250 crore is included in the Indian Bank QIP, with the option to increase it by Rs 1,500 crore. The approximate price at which the shares are expected to be placed in QIP is Rs 394 per share, which represents a roughly 5% discount to the floor price of Rs 414.44 set by the Securities and Exchange Board of India (SEBI) and a nearly 10% discount to the closing price of Rs 437 on December 12.

A qualified institutional purchase program, or QIP, allows listed companies in India to obtain money without having to do a public offering by distributing securities to qualified buyers.

August saw the approval of the QIP. Axis Capital, IIFL Capital Services, ICICI Securities, Emkay Global, and SBI Capital are the book-running managers for QIP.

The QIP from Indian Bank comes after the Rs 750 crore issue from Jammu & Kashmir Bank and the Rs 4,500 crore offer from Bank of India.

Indian Bank shares closed more than 1% higher on December 12 at Rs 437.20 on the National Stock Exchange (NSE). This year, the stock has increased by over 47%, outpacing the benchmark Nifty 50, which has increased by almost 15%.

The promoters owned 79.86 percent of Indian Bank as on September 30. In the July-September quarter, foreign institutional investors grew their stake in the state-run lender from 4% to 4.33%.

Mutual funds also saw an increase in their holdings, going from 7.89% to 8.01% in the second quarter of the fiscal year.

For feedback and suggestions, write to us at [e-mail]