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IDBI Bank is planning to raise ₹11,000 crore equity capital to enable it to strengthen its capital adequacy.
The Bank will seek shareholders’ approval to a Resolution that seeks to enable it to offer, issue and allot equity shares aggregating up to ₹11,000 crore (inclusive of premium amount) at its Annual General Meeting on August 17.
The Life Insurance Corporation of India (LIC) promoted Bank will raise these resources by way of public issue, rights issue, issue on private placement basis, Qualified Institutions Placement (QIP), Employee Stock Purchase Scheme (ESPS), Employee Stock Option Plan (ESOP), etc.
The issue proceeds will enable the Bank to strengthen its Capital Adequacy Requirements as specified by the Reserve Bank of India (RBI) from time to time, the Bank said in its annual report.
“In view of ongoing implementation of BASEL III norms and consequential capital charge, there is a need to increase the capital to further strengthen the Capital Adequacy Ratio. The Special Resolution passed at the last AGM held on August 20, 2019 for Issue of Capital under QIP route, is valid only for one year…for QIPs,” the Bank said.
IDBI Bank is also seeking shareholders’ nod for a special resolution whereby allotment of equity shares will be completed within 12 months from the date of passing of this resolution in respect of a QIP.
During FY 2019-20, the Bank raised funds through preferential allotment of equity shares on October 22, 2019 aggregating to ₹4,743 crore to the Life Insurance Corporation of India and aggregating up to ₹4,557 crore to Government of India.
IDBI Bank further issued bonds of ₹745 crore on February 3, 2020. The Bank said the proceeds have been fully utilised for augmenting the capital adequacy of the Bank and for general business purposes.
Life Insurance Corporation of India (LIC) acquired majority stake (51 per cent) in IDBI Bank in January 2019, becoming its promoter.
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