AU Small Finance Bank gains on successfully raising funds via QIP

AU Small Finance Bank advanced 3.34% to Rs 1226.85 after the company successfully raised Rs 625.50 crore through qualified institutional placement (QIP) route.

The capital raising committee of board of directors of the bank, at their meeting held on Monday (15 March 2021) approved allotment of 50 lakh shares to eligible qualified institutional buyers at the issue price of Rs 1251 per equity share. The QIP issue opened on 9 March 2021 and closed on 15 March 2021.

The issue witnessed strong reception from both domestic and international institutional investors and the entire QIP was subscribed by sovereign wealth funds, large foreign portfolio investors, life insurance company and domestic mutual funds.

Allottees who were issued more than 5% of the total equity shares offered in the QIP are Small Cap World Fund (39.66%), Government of Singapore (26.69%), HDFC Life Insurnace Company (23.60%) and Monetary Authority of Singapore (5.91%).

Pursuant to the allotment of equity shares in the issue, the paid-up equity share capital of the bank stands increased from Rs 307,08,99,980 consisting of 30,70,89,998 equity shares to Rs 312,08,99,980 consisting of 31,20,89,998 equity shares.

AU Bank intends to use the net proceeds for supporting the long term growth aligned to Bank's internal risk appetite, for maintaining sufficient headroom over and above the regulatory capital adequacy requirements; and/ or, for general corporate requirements or any other purposes, as may be permissible under the applicable law and approved by the bank's board or its duly constituted committee.

Speaking on the fund raise, Sanjay Agarwal, MD & CEO of AU Bank said, "We have successfully closed the first ever QIP of the Bank. The bank has emerged stronger after the pandemic, and our performance gives us greater confidence to continue serving the small businesses and retail borrowers in the underserved and unserved rural and semi-urban regions of the country. We intend to use the net proceeds from this issue, amongst others, to support the long-term growth of the bank."

AU Small Finance Bank operates as a commercial bank. The bank offers financial products and services such as savings and current accounts, term deposits, debit cards, insurance, government banking, retail loans, and microfinance lending.

The bank's standalone net profit jumped 151.9% to Rs 479.02 crore on 51.2% rise in total income to Rs 1924.53 crore in Q3 FY21 over Q3 FY20.

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