1 min read.Updated: 29 Oct 2020, 03:54 PM IST Written By Anulekha Ray
It would be the first time in many years that IDBI Bank will be seeking funds from investors via a share sale
The bank reported a net profit of ₹324 crore for the quarter ended 30 September
IDBI Bank on Thursday said that it has received shareholders' approval to raise up to ₹6,000 crore through a placement of shares with institutional investors. "... the Board at its meeting held today i.e. October 29, 2020, has passed a resolution for approving the raising of funds for an amount not exceeding ₹6,000 crore through issue of equity shares through qualified institutions placement subject to approvals of the regulatory and/or statutory authorities, as applicable," the lender said in the BSE filing.
It would be the first time in many years that IDBI Bank will be seeking funds from investors via a share sale. The bank earlier got shareholders’ approval to raise up to ₹11,000 crore by issuing shares through various modes.
The Reserve Bank of India put the IDBI Bank under prompt corrective action (PCA) framework in May 2017. Life Insurance Corporation of India acquired 51% stake in the private sector lender in January 2019.
The bank reported a net profit of ₹324 crore for the quarter ended 30 September, 2020. The total income of the bank fell by 7.5% year-on-year to ₹5,761.06 crore for the quarter under the review. The bank's net interest income grew to ₹1,695 crore during the reported quarter.
Gross NPA ratio improved to 25.08% as on September 30, 2020 as compared to 26.81% in the June quarter. Net NPA ratio also improved to 2.67% in the September quarter as against 3.55% in the previous quarter.
Provisions for bad loans and contingencies were down at ₹581.15 crore for the September quarter. "Bank has made COVID-19 related provision of ₹247 crore in March 2020 quarter and ₹189 crore in June 2020 quarter. Cumulative COVID-19 related provision was ₹436 crore as at September 30, 2020. The provision made by the bank is more than minimum required as per the RBI guidelines," IDBI Bank said.