January 2016 , Banking
In brief: IDBI Bank will raise capital through Qualified Institutional Placement
State-run lender, IDBI Bank, is planning to raise Rs.3,771 crore by way of qualified institutional placement (QIP) which could see government stake reduce by 25 per cent, according to an exchange filing.
“Govt. of India has conveyed its approval to IDBI Bank to raise capital to the tune of Rs.3,771 crore, through QIP route, at an appropriate time during the year.”
According to bank officials, IDBI Bank has projected a capital requirement of Rs.6,000 crore to support its growth needs apart from meeting Basel-III norms. Earlier, the bank said that the government has decided to infuse Rs.2,229 crore into the bank. At present, the government holds 76.5 per cent in the bank. After this infusion, government stake in the bank will go over 80 per cent.
However, if the bank goes ahead with its proposed QIP issue, the government’s stake in the bank will come down by around 25 per cent, bank officials said.
What is QIP?