Business News/ Industry / Banking/  Axis Bank raises 12,500 crore via QIP from GIC, others

MUMBAI : Private sector lender Axis Bank Ltd has raised 12,500 crore in India’s second-largest qualified institutional placement (QIP) from large foreign and local investors, said two people aware of the development.

In 2017, government-controlled State Bank of India had raised 15,000 crore in the nation’s largest QIP.

Foreign institutional investors (FIIs) that participated in the share sale include funds managed by Singapore’s sovereign wealth fund GIC and American investors T Rowe Price and BlackRock, said one of the two people cited above, requesting anonymity as he is not authorized to speak to reporters.

“The book was subscribed almost equally by foreign and domestic investors such as mutual funds. Most of the existing investors took part in the QIP," he added.

A QIP is a capital-raising tool through which listed companies can sell shares, fully and partly convertible debentures, or any securities other than warrants that are convertible into stocks, to a qualified institutional buyer.

Axis Bank launched the institutional share sale on 19 September, setting a floor price of 661.50 per share.

According to the second person cited above, the lender has sold shares in the QIP at 628-629 per share. He too declined to be identified.

Securities and Exchange Board of India rules allow companies to sell at as much as 5% discount to the QIP floor price. A board committee will meet on 25 September to consider and approve the price of the shares to be issued through the QIP, the lender said in a stock exchange filing.

T Rowe Price declined to comment. Emails sent on Friday to GIC, BlackRock and Axis Bank did not elicit a response.

“The bank intends to use the net proceeds to enhance its capital adequacy, in accordance with regulatory requirements, its growth strategy and for general corporate purposes, in accordance with applicable law," it said in a regulatory filing on Thursday.

In 2017, Axis Bank raised up to 11,625.8 crore through a private placement of shares to a clutch of investors led by private equity fund Bain Capital.

The latest fundraise makes Axis Bank the third bank to raise funds through a QIP this year, at a time when markets have largely been volatile due to domestic growth concerns and external factors such as US-China trade war and crude prices.

In August, troubled private lender Yes Bank Ltd raised 1,930 crore through a QIP offering, while in March, Lakshmi Vilas Bank Ltd raised 459.5 crore through a sale of shares to institutional investors.

Several other lenders, including non-banks are expected to tap the public markets to raise capital in the coming months.

Mint reported on 5 September that Bajaj Finance Ltd has hired investment banks to raise as much as $1 billion through a QIP.

Swaraj Singh Dhanjal
" Based in Mumbai, Swaraj Singh Dhanjal is responsible for Mint’s corporate news coverage. For the past eight years he has been writing on the biggest deals in private equity, venture capital, IPO market and corporate mergers and acquisitions. An engineer and an MBA, he started his journalism career in 2014 with Mint. "
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Updated: 22 Sep 2019, 11:07 PM IST
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