Indian Bank launches Rs 4,000 crore QIP, stock edges higher

Indian Bank shares opened on a positive note on December 13 as the public sector lender launched its qualified institutional placement (QIP) to raise up to Rs 4,000 crore. The bank’s board has set the floor price for the issue at Rs 414.44 a share.

The Committee of Directors (Capital Raising) of the bank will meet on December 15 to consider and approve the issue price of equity shares to be allotted to qualified institutional buyers (QIBs).

At 9:16 am, Indian Bank shares were trading 1.4 percent higher at Rs 443.70 on the National Stock Exchange (NSE).

Also Read | Indian Bank launches QIP today; floor price at Rs 414.44/share

The Indian Bank QIP includes a base issue size of Rs 2,250 crore and can be upsized by Rs 1,500 crore. The indicative price the shares are likely to be placed in QIP may come at Rs 394 apiece, which will be a discount of almost 5 percent to the Securities and Exchange Board of India (SEBI) floor price of Rs 414.44 and a nearly 10 percent discount to December 12 closing price of Rs 437.

A QIP is a process through which a listed company in India can raise capital by issuing securities to qualified institutional buyers without the need for a public offering.

The QIP was approved in August. The book-running managers for the QIP are Axis Capital, IIFL Securities, ICICI Securities, Emkay Global, and SBI Capital.

Indian Bank’s QIP follows Bank of India’s Rs 4,500 crore offer and Jammu & Kashmir Bank’s Rs 750 crore issue.

On December 12, Indian Bank shares ended over a percent higher at Rs 437.20 on the National Stock Exchange (NSE). The stock has rallied over 47 percent his year, outperforming the benchmark Nifty 50 which has risen around 15 percent during this period.

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As of September 30, promoters held 79.86 stake in Indian Bank. Foreign institutional investors increased their holdings in the state-run lender to 4.33 percent in the July-September quarter from 4 percent earlier.

Mutual funds, too increased their holdings from to 8.01 percent in the fiscal second quarter from 7.89 percent in the previous quarter.

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