Mumbai: Axis Bank Ltd on Friday said its board had approved raising up to Rs11,625.8 crore ($1.78 billion) through a private placement of shares from a clutch of investors led by private equity fund Bain Capital.

On 1 November, Mint reported several investors, including Bain Capital, were in talks to buy up to a 10% stake in the private sector lender.

Bain Capital is picking up a 4% stake in the transaction, an Axis Bank filing with the stock exchanges showed. Bain Capital is investing Rs5,179 crore for the stake and will have the right to nominate a director on bank’s board, the filing said.

According to the bank’s filing, Bain Capital is being joined by investors such as American asset manager Capital Group (which is investing through multiple funds) and Life Insurance Corporation of India (LIC). The fund-raising will see the bank dilute a stake of around 9%.

The preferential allotment of shares will have to be approved by the bank’s shareholders. The bank said it will soon call an extraordinary general meeting to seek shareholder approval.

The fund-raising will provide Axis Bank capital to shore up its balance sheet at a time when the lender’s non-performing assets (NPA) have surged. In the quarter to September, Axis Bank’s gross NPAs rose to Rs27,402.32 crore from Rs16,378.65 crore a year ago and Rs22,030.87 crore in the June quarter.

The rise in NPAs came after the Reserve Bank of India pointed to under-reporting of Rs5,632 crore worth of toxic assets after conducting its annual risk-based supervision exercise.

This year has seen several large equity capital raises by Indian banks.

In June, public sector lender State Bank of India (SBI) raised Rs15,000 crore through a so-called qualified institutional placement (QIP). In May, private sector lender Kotak Mahindra Bank Ltd raised Rs5,800 crore through a QIP. Yes Bank Ltd raised Rs4,900 crore through a QIP in March.

Other banks that have raised equity capital this year include RBL Bank Ltd, Federal Bank Ltd, DCB Bank Ltd and Dena Bank Ltd.

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