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| Axis Bank plans to raise up to Rs 5k cr |
| BS Reporter / Mumbai Aug 05, 2009, 00:15 IST |
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Leading private sector lender Axis Bank will issue 71.4 million fresh equity shares through Global Depository Receipts (GDRs) or qualified institutional placement (QIP) to support growth.
The quantum of capital to be raised could touch Rs 5,000 crore but the details were yet to be firmed up, said a senior bank official. Its capital adequacy stood at 15.28 per cent with Tier-I capital of 9.39 per cent at the end of June 2009.
The plan was approved by the directors today. Apart from issuing GDRs and a QIP placement, it might also consider preferential allotment to promoters, the bank said in a statement.
At the end of June 2009, promoters held 42.22 per cent in the bank. Among the promoters, Specialised Undertaking of Unit Trust of India has the largest holding of 27.02 per cent, followed by Life Insurance Corporation of India at 10.34 per cent. The balance is shared between General Insurance Company and four state-owned non-life insurance companies.
The stock of the bank closed lower at Rs 894.65 compared with the previous day’s close Rs 921.55 on the Bombay Stock Exchange. The bank has shareholders’ approval to raise Rs 3,000 debt through private placements and has already raised Rs 2,000 crore.
Other two private sector banks, Bangalore-based ING Vysya Bank and Development Credit Bank, have also announced plans to raise capital. DCB plans to raise Rs 300 crore by issuing fresh equity shares — up to Rs 100 crores via the QIP route and up to Rs 200 crore via a rights rssue in the next 12 months.
Banks are issuing fresh equity shares to shore up their Tier-I capital base as banking regulators the world over are placing emphasis on shoring up core capital to create a buffer to withstand shocks like the present financial meltdown.
Meanwhile, the board also gave nod to increase the maximum strength of the board of directors of the bank from 12 to 15 and alter the articles of association for increasing the maximum number of directors to 15. This increase will be subject to approval of the government of India.
Names M M Agrawal as deputy MD
Mumbai: Axis Bank today announced the appointment of M M Agrawal as the bank’s deputy managing director effective today. He is currently the executive director in charge of corporate and international banking. “Agrawal’s elevation as the deputy managing director will further strengthen the top management team and take it to the next growth orbit,” said Shikha Sharma, MD & CEO, Axis Bank. Agrawal said he would be more involved with the strategic initiatives of the bank as part of his new job profile. Agrawal was one of the contenders, along with executive director for retail banking Hemant Kaul, to succeed erstwhile chairman and CEO P J Nayak on the latter’s retirement.
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