Axis Bank gets nod for GDR issue; QIP soon

After getting a green signal from shareholders to raise equity capital, Axis Bank will soon launch share offerings, including Global Depository Receipt and qualified institutional placement (QIP).

Banks expects to raise upto Rs 5,000 crore through the equity issue to support business growth.

Axis Bank in a statement said it has obtained approval from its shareholders through a postal ballot for issuing not more than 7.14 crore equity shares by way of GDR/ QIP/ Preferential Allotment.

This resolution enables the bank to raise equity capital at an appropriate time, it added.

Market sources said private sector bank was in process of completing regulatory formalities and documentation and GDR and QIP have not yet been launched. The prospectus for QIP would be placed on bank and stock exchange website.

The issue price for preferential allotment to promoters has been fixed at Rs 903 per share based on Securities Exchange Board of India’s pricing formula.

The bank is likely to raise about Rs 940 crore through preferential allotment of 1.08 crore shares to its promoters, including LIC, by September 24.

The Special Undertaking of Unit Trust of India (SUUTI), which was carved out of the erstwhile Unit Trust of India in 2003, will not participate in the proposed preferential offer of Axis Bank (formerly UTI Bank). The shareholding of SUUTI in the bank will come down from 27.02 per cent to 22.54 per cent.

The other promoters are Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC) and the other four general public sector companies — New India Assurance, United India, Oriental and National Insurance.

In July 2007, Axis it has raised $ 218.07 million through GDRs. GDRs are listed on the London Stock Exchange. In addition it raised Rs 1,752 crore via QIP by pricing share at Rs 620 per share. It also had issued shares to promoters through preferential allotment.

The bank stock closed slightly lower at Rs 909 on Bombay Stock Exchange (BSE) today.