IDBI Bank likely to draw Rs 1,500-crore fresh equity capital from LIC

 

The base size of issue was Rs 1,000 crore with green shoe option of Rs 1,000 crore. The issue opened on December 15 and closed on December 18.

IDBI Bank on Monday said it had option to draw Rs 1,500 crore as equity capital from its promoter Life Insurance Corporation of India (LIC). The bank, with LIC and the government of India as its promoter, raised equity capital Rs 1,435 crore through Qualified Institutional Placement (QIP) last week.
Rakesh Sharma, MD and CEO, said the shareholding of LIC had come down (fell below 51 per cent), so the bank could take up to Rs 1,500 crore capital from LIC. It will be through preferential allotment. He, however, did not give timeline for capital infusion from LIC.

LIC held 51 per cent stake prior to QIP. After QIP, LIC’s stake dipped in expanded capital base, creating room for LIC to infuse more equity to move to 51 per cent level. IDBI Bank stock closed 5.93 per cent down at Rs 38.1 per share on the BSE.

The bank issued 371.8 million to 44 institutional investors at an issue price of Rs 38.6 per equity share. It gave shares at 5 per cent discount on floor price of Rs 40.63 per equity share. It raised Rs 1,435 crore as against QIP size of Rs 2,000 crore.

The base size of issue was Rs 1,000 crore with green shoe option of Rs 1,000 crore. The issue opened on December 15 and closed on December 18.

The capital adequacy will increase by almost 91 basis points on raising of equity capital through QIP. The capital adequacy stood at 13.67 per cent at end of September 2020. This does not include the profits earned in first half ended September 2020, Sharma said.