Explorer

Public Lenders SBI, Punjab National Bank, Bank of Baroda Likely To Opt For Share Sale This Fiscal

SBI, PNB, BoB and Union Bank of India are expected to opt for Qualified Institutional Placement to rase capital but most likely teh banks will decide on the mode after their second-quarter results.

New Delhi: In an attempt to infuse capital, five large public sector banks including State Bank of India, Punjab National Bank and Bank of Baroda, are expected to sell shares to institutional investors in the second half of this fiscal. Also Read: 180 Million PAN Cards May Be Defunct by 2021 As IT Dept Tightens Noose Around Tax Evaders; Check Details What is the expected mode of the share sale? As per the PTI report, Qualified Institutional Placement (QIP) will remain the preferable mode and the banks mentioned are expected to decide on the route after their second-quarter results. By the second quarter, banks will get a better picture of their Non-Performing Assets (NPAs), one-time loan restructuring, and consequent rating by end of October. Later the banks are expected to decide the time, quantum, appointment of merchant bankers, and other formalities. Which banks are likely to opt for share sale? According to the PTI report, four to five large banks like State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BoB) and Union Bank of India would be aiming to raise capital towards the end of the third quarter or during the fourth quarter of this fiscal. Punjab National Bank PNB has already hinted at targeting capital markets in the fourth quarter this fiscal to raise funds to help meet growth needs and regulatory requirements. "We will be planning (capital raising) somewhere around the end of the third quarter or the beginning of fourth quarter. By this time, we would have declared two quarterly balance sheet of the amalgamated entities," PNB Managing Director S S Mallikarjuna Rao told the news agency PTI. State Bank of India Just before the capital raising exercise, most of the public sector banks have already got shareholders' approval to opt for a mix of debt and equity route in the current fiscal. Shareholders of SBI have given approval for raising Rs 20,000 crore through public issue or private placement of shares while PNB has received shareholders' nod for mopping up Rs 7,000 crore. Bank of Baroda & Union Bank of India BoB and Union Bank of India have also the nod to raise Rs 9,000 crore and Rs 6,800 crore, respectively, by way of common equity capital through various modes, including QIP. In fact, private lenders, including ICICI Bank, Axis Bank, and Kotak Mahindra Bank, have already mobilised capital through QIPs in the last three months. The banks will have to plan capital raising in a manner that there is no crowd out of liquidity and enough space is available to both domestic and global investors to participate in various QIPs. Why banks are raising capital? Banks need to raise capital based on the assumptions of growth in Risk Weighted Assets (RWA) and ploughing back of profits. As far as raising capital through Tier I and Tier II bonds are concerned, SBI recently raised Rs 8,931 crore by issuing Basel III-compliant bonds to investors. PNB attracted Rs 994 crore by issuing Basel III-compliant bonds on private placement basis while BoB raised Rs 981 crore by issuing additional tier-1 bonds.
View More
Advertisement
Advertisement
25°C
New Delhi
Rain: 100mm
Humidity: 97%
Wind: WNW 47km/h
See Today's Weather
powered by
Accu Weather
Advertisement

Top Headlines

'Not In Good Taste', 'No Significance In Maharashtra': NDA Leaders Divided Over 'Batenge To Katenge' Slogan
'Not In Good Taste', 'No Significance In Maharashtra': NDA Leaders Divided Over 'Batenge To Katenge' Slogan
GRAP 3 In Delhi From Tomorrow As AQI Remains In 'Severe' Category. Details Here
GRAP 3 In Delhi From Tomorrow As AQI Remains In 'Severe' Category. Details Here
AAP's Mahesh Kumar Khichi Elected As Delhi's New Mayor Amid Cross-Voting
AAP's Mahesh Kumar Khichi Elected As Delhi's New Mayor Amid Cross-Voting
'Cong Desperate For Power Like Fish Out Of Water': Modi At Mumbai Rally, Takes 'Remote Control' Jibe At Uddhav
'Cong Desperate For Power Like Fish Out Of Water': Modi At Mumbai Rally, Takes 'Remote Control' Jibe At Uddhav
Advertisement
ABP Premium

Videos

Nirmala Sitharaman Announces Game-Changing Collateral-Free Loan Scheme for MSMEsSIP Emerges as a Safe Investment Amidst Market Fluctuations | Paisa LiveTop Banks Offering 8.75% Interest for Senior Citizens: Here’s What You Need to Know!RBI Set to Make a Big Decision on Your EMI: What You Need to Know!

Photo Gallery

Embed widget