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Vijaya Bank plans to launch a ₹500-crore bond issue to fund its business growth in the current financial year, said V Kannan, Chairman and Managing Director of the bank. This will be in addition to the ₹600-crore equity offering planned for sometime in October.
Kannan said the bank expects its credit growth to exceed the current year’s target of 17 per cent on account of improving business sentiment.
Recently, Vijaya Bank received shareholders’ nod to raise additional equity capital of ₹600 crore from the market. “We will be approaching the Government and the RBI for approvals soon and probably hit the market by end of this quarter or October,” Kannan said.
The bank is looking at qualified institutional placement (QIP) as a preferred option to raise the capital, considering that it is cost effective and can be completed in a short time. “Depending upon the guidance of the Government, we could also look at a rights issue or follow-on public offer,” Kannan said.
Vijaya Bank has ruled out raising funds overseas, considering that it hardly has any presence outside India. However, the bank is approaching overseas investors to support its issue domestically, Kannan said.
As on March 31, 2014, FIIs held about 2.02 per cent in Vijaya Bank. The Government, which owns 74.06 per cent, could bring down its stake in the bank.
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