State-owned Punjab National Bank on Monday launched a qualified institutional placement (QIP) offer to raise equity capital from qualified institutional investors to expand its capital base after the board's approval.
The bank will raise funds from institutional investors for the second time in the last six months. Earlier in December, it raised Rs3,788 crore in December through a QIP. The bank has fixed the floor price at Rs 35.51 per equity share for the QIP.
The 'Relevant Date' for the purpose of the QIP is May 10, 2021, and accordingly, the floor price in respect of the aforesaid QIP, based on the pricing formula as prescribed under SEBI ICDR Regulations is Rs 35.51 per equity share, said the lender in a regulatory filing.
What’s the expected amount to be raised?
The bank may offer a discount of not more than 5 percent on the floor price at its discretion. The lender aims to raise up to Rs1,800 crore through the share sale, as per the Mint report. The base size of the share sale is expected to remain Rs1,200 crore with the option to upsize to Rs1,800 crore based on the demand.
However, the bank did not disclose how much it intends to mobilise through the QIP. There is a scope to raise about Rs 3,200 crore from share sale as per the board and shareholders' approval of July 9 and August 4, 2020, respectively.
The board had given nod for mobilising Rs 7,000 crore from QIP in one or more than one tranches, as per PTI report. Of this, the bank had raised Rs 3,788.04 crore from QIP in December following which the government holding in the bank came down from 85.59 per cent to 76.87 percent.
A meeting of the Capital Raising Committee scheduled on Friday, May 14, 2021, will determine the issue price, including a discount if any, for the shares to be allotted to eligible Qualified Institutional Buyers.
The issue price will be determined by the bank in consultation with the Book Running Lead Managers appointed for the QIP Issue, it said.