Axis Bank is considering raising at least $1.3 billion through a share sale to institutional investors, according to the sources, as the private lender seeks to bolster capital ratios and expand lending capacity.
India’s third-largest private sector lender is talking to potential advisers about the fundraising, according to the people. The bank plans to seek board approval for the sale as early as next month, sources said.
The deal would help the Mumbai-based lender enhance risk buffers and support loan growth at a time when shadow banks in the country are battling a liquidity crunch due to rising wariness in the nations credit market. In March, the bank’s overall capital adequacy ratio was lower than its top private-sector peers.
No final decisions have been made, and the potential deal could still be delayed or fall apart, the people said. A spokeswoman for Axis Bank didn’t immediately respond to a request for comment.
Shares of the lender erased earlier gains of as much as 2.3 per cent to fall 0.9 per cent to ₹781.6 in BSE index Sensex. The bank is still the best-performing stock on the 10-member Bankex index in 2019 with gains of 28 per cent, compared with a 10 per cent advance in the benchmark index.