Axis Bank to sell shares to founders

Axis Bank to sell shares to founders
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First Published: Wed, Aug 12 2009. 03 27 PM IST
Updated: Wed, Aug 12 2009. 03 27 PM IST
Mumbai: Axis Bank plans to issue 10.83 million shares, worth about $190 million at current prices, to its founders as part of a larger share sale plan to beef up its capital base.
“The bank has continued to grow strongly over the last few years and foresees a demand for credit in various sectors including the retail banking segment,” the bank said in a note to investors.
“Success in encashing this business opportunity rests on the ability to raise funds by way of equity,” it said.
The lender has sought shareholder approval to sell a total of 71.4 million shares through private placement to institutions or global depositary receipts. At current prices the share sale would raise up to $1.25 billion.
An economic revival has made companies to revisit expansion plans, fueling demand for loans and prompting banks to raise capital.
Earlier sources said smaller rival IndusInd Bank sold shares worth $100 million to institutions.
Axis Bank said shares would be issued to founders, Life Insurance Corp., General Insurance Corp. and four general insurance firms to allow them to maintain their 15.16% holding.
Another founder and the largest shareholder, government-controlled specified undertaking of UTI, will not participate in the offering and its stake will fall to 22.54% from 27.02%, Axis Bank said in the note.
Axis Bank, which the market values at $6.5 billion, was trading down 2.2% at Rs847.50 by 130pmin a weak Mumbai market.
The shares have risen 68% so far this year compared to a 53% rise for the benchmark.
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First Published: Wed, Aug 12 2009. 03 27 PM IST