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Home » Finance Current Affairs » Axis Bank opens QIP, GDR issue to raise $720 mn

Axis Bank opens QIP, GDR issue to raise $720 mn

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Axis Bank on Thursday opened its qualified institutional placement (QIP)-cum-global depository receipts (GDR) issue through which it proposes to raise up to $720 million (around Rs 3,450 crore).

Bankers associated with the transaction said that the issue was priced at Rs 906, at a marginal discount to the bank's closing price of Rs 911.55 on the Bombay Stock Exchange on Thursday.

While the bank plans to raise $600 million (around Rs 2,900 crore), it has the option to raise up to $720 million.

Though the bank had a capital adequacy ratio of 15.28 per cent at the end of June, against the regulatory prescription of 9 per cent, the country's third-largest lender is preparing to keep funds ready to expand operations. In its prospectus, the bank has said that the proceeds of the funds would be used to expand the bank's operations with retail banking, private equity, mutual fund and wealth management identified as areas where it would like to grow.

Of its loan book of Rs 78,100 crore at the end of the first quarter, around 21.5 per cent or Rs 16,791 crore was from the retail portfolio. Expanding its presence in Singapore, Hong Kong, the United Arab Emirates and Shanghai is the other focus area.

The Special Undertaking of Unit Trust of India (SUUTI), which was carved out of the erstwhile Unit Trust of India in 2003, will not participate in the proposed preferential offer of Axis Bank. Following the issue, SUUTI's shareholding would drop from 27.02 per cent to 22.54 per cent.

In July 2007, the bank had raised $218.07 million through GDRs, which are listed on the London Stock Exchange. In addition, it raised Rs 1,752 crore through QIP at Rs 620 per share. It also had issued shares to promoters through preferential allotment.

Among the promoter group, Life Insurance Corporation (7.38 million), General Insurance Corporation (1.59 million), New India Assurance (755,518), National Insurance (529,702), Oriental Insurance (305,804) and United India Insurance (258,234) would be allotted shares.

The bank has already received its shareholders' nod for issuing up to 71.4 million shares by way of GDR, QIP and preferential allotment.

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