Home >Markets >Ipo > Punjab National Bank launches 1,800 crore share sale

State-owned Punjab National Bank on Monday launched a so-called qualified institutional placement (QIP) offer to raise as much as Rs1,800 crore from institutional investors.

This is the second time the state-owned bank has hit the market to raise funds from institutional investors in the last six months, having raised Rs3,788 crore in December through a QIP.

The lender plans to raise up to Rs1,800 crore through the share sale, said a person aware of the bank’s fundraising plans. “The base size of the share sale is Rs1,200 crore with the option to upsize to Rs1,800 crore, depending on the demand. At the base size the fundraise will result in a dilution of 3.4%, while at the upper end it will be a dilution of 5.1%" he said, speaking on the condition of anonymity, as he is not authorized to speak with the media.

On Monday, the bank said that its board has approved issuance of shares to investors at a floor price of Rs35.51 per share in the QIP offering.

Shares of PNB closed trading on Monday at Rs35.6 apiece on the BSE, down 1.66%.

“The indicative issue price is Rs33.75 per share," the person cited above added.

The funds raised will be used to grow the bank’s loan book.

“Subject to compliance with applicable laws, our Bank intends to utilize the Net Proceeds towards (i) augmenting our Bank’s Tier I Capital to meet the Basel III and to support growth plans and to enhance the business of our Bank; and/ or, (ii) general corporate requirements or any other purposes," the bank said in an offer document filed with the stock exchanges.

Investment banks ICICI Securities, Axis Capital, Edelweiss Financial Services, among others, are advising the lender on the share sale.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Edit Profile
My ReadsRedeem a Gift CardLogout