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Punjab National Bank (PNB) has launched its Qualified Institutional Placement (QIP) issue on Tuesday, seeking to mop up about ₹7,000 crore.
The capital-raising committee of the bank, which met on Tuesday, had approved the floor price of ₹37.35 per share for the QIP.
The committee will next meet on Friday to consider and determine the issue price for the equity shares, including the discount, to be allotted to Qualified Institutional Buyers, said PNB in a filing with the stock exchanges.
Post the QIP, the tier-I capital is expected to increase 113 basis points and book value is likey to come down by more than 10 per cent, given equity dilution of more than 21 per cent. The government’s stake in PNB is likely to come down to 70.8 per cent from 85.6 per cent, said banking industry observers.
It may be recalled that SS Mallikarjuna Rao, Managing Director and CEO, PNB, had last month said that the bank had approvals from the board and the government to raise ₹14,000 crore. The ₹14,000 crore comprises QIP of ₹7,000 crore; AT-1 capital of ₹3,000 crore and ₹4,000 crore of Tier-2 capital. In Tier-2 capital, PNB had already raised ₹2,500 crore in July and September.
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