IDBI Bank falls 19% on listing of fresh shares allotted to QIBs

Shares of IDBI Bank tanked 19 per cent to Rs 30.80 on the BSE in early morning trade on Tuesday after listing 371.8 million equity shares allotted to qualified institutional buyers (QIBs) pursuant to qualified institutional placement (QIP). The stock was trading lower for the fourth straight day, down 27 per cent during the period.

The Committee, at its meeting held on Saturday i.e. December 19, 2020, approved the issue and allotment of 371.8 million equity shares to the 44 eligible QIBs at the issue price of Rs 38.60 per equity share, aggregating to Rs 1435.18 crore. The bank allotted shares after offering about 5 per cent discount on the floor price of Rs 40.63 per equity share.

The bank had targeted raising Rs 2,000 crore (base size Rs 1,000 crore with a green-shoe option of Rs 1,000 crore) through the QIP issue that had opened on December 15 and closed on December 18.

Among the investors who were allotted more than 5 per cent of shares in the QIP issue were Punjab National Bank (20.9 per cent subscription); Bank of Baroda (13.9 per cent); State Bank of India (13.9 per cent); Indian Bank (6.97 per cent); Canara Bank (6.97 per cent) and Societe Generale-ODI (5.66 per cent), the bank said.

In another development, the lender said on Monday it had an option to draw Rs 1,500 crore as equity capital from its promoter Life Insurance Corporation of India (LIC). 

Rakesh Sharma, MD and CEO, said the shareholding of LIC had come down (fell below 51 per cent) after QIP, so the bank could take up to Rs 1,500 crore capital from LIC.

LIC held 51 per cent stake prior to QIP. After QIP, LIC’s stake dipped in expanded capital base, creating room for LIC to infuse more equity to move to 51 per cent level. READ MORE
 

At 09:46 am, IDBI Bank was trading 17 per cent lower at Rs 31.45 on the BSE, as compared to a 0.80 per cent decline in the S&P BSE Sensex. A combined 9.7 million equity shares changed hands on the counter on the NSE and BSE.