Private sector lender Axis Bank on Tuesday said it has raised Rs10,000 crore through a qualified institutional placement (QIP) of shares.
The bank said in a statement that despite a challenging macroeconomic environment, the placement has witnessed strong reception from global and domestic investor communities, including several large foreign portfolio investors, domestic mutual funds and insurance companies. However, it did not disclose the names of these investors.
The deal, Axis Bank said, was oversubscribed with the aggregate final transaction size being Rs10,000 crore. According to the statement, the QIP issuance was done at a price of Rs420.1 per equity share. The issuance price of Rs420.1 is at a discount of 5% to the floor price of Rs442.19, determined based on the pricing formula, it said.
The fund-raise is expected to bolster the bank’s capital position amid the covid-19 crisis that has forced lenders to set aside more provisions and cover against future bad loan shocks. The bank’s total capital adequacy ratio under Basel III stood at 17.29% as on 30 June.
Amitabh Chaudhry, chief executive, Axis Bank, said that the bank has received great response from global and local investors alike.
“We believe that the bank is well-placed to leverage all possible growth opportunities that will come in as the economy opens up and is in a strong position to combat the challenges that emanate from the covid-19 pandemic crisis," said Chaudhry.
On 4 August, the lender had launched a QIP offering to raise as much as Rs10,000 crore. The bank, in a stock exchange filing, had said that its board had approved the launch of the share sale and had fixed a floor price of Rs442.19 per share for the QIP offering.
According to terms of the deal seen by Mint, the bank was targeting a base deal size of Rs8,000 crore, with an option to up size the deal by Rs2,000 crore. The bank’s in-house investment banking unit, Axis Capital, and other investment banks such as UBS and BNP Paribas advised the share sale, Mint reported on 4 August.
Shares of the bank were trading at Rs439.45 at 11 am on Tuesday, up 1.97% from its previous close.
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