Indian Bank soars on launching QIP issue

Indian Bank announced that the capital raising committee of the bank's board approved and authorized the opening of the QIP on 21 June 2021.

Boosted by the QIP launch announcement, shares of Indian Bank jumped 5.22% to Rs 153.10. On the BSE, the counter clocked volume of 6.89 lakh shares, a 2.57 times spurt over the two-week average trading volume of 2.68 shares.

In the past six months, the stock has gained 84.47% while the benchmark Sensex has added 14.95% during the same period.

The floor price of the QIP is Rs 142.15 per equity share, the government-backed lender said in a regulatory filing. The floor price is set at a discount of 2.30% to Monday's closing price of Rs 145.50 per share.

The capital raising committee of the bank is scheduled to be held on Thursday, 24 June 2021, to consider and determine the issue price, including a discount, if any, for the equity shares to be allotted to eligible qualified institutional buyers, pursuant to the QIP issue. The bank may, at its discretion, offer a discount of not more than 5% on the floor price.

On 22 January 2021, Indian Bank's board had approved raising equity capital aggregating up to Rs 4000 crore through qualified institutions placements (QIPs)/follow on public offer (FPO)/ rights issue or in combination thereof, subject to regulatory approvals. The bank received shareholders' authorization for the QIP on 2 March 2021.

On March 9, the committee of directors had accorded approval for raising equity capital aggregating up to Rs 4,000 crore through QIP in one or more tranches.

In its draft placement document filed with the bourses, Indian Bank said that it intends to utilize the net proceeds towards augmenting our bank's Tier I Capital to meet the Basel III and to support growth plans and to enhance the business of the bank and for general corporate requirements or any other purposes, as may be permissible under the applicable law and approved by our Board or its duly constituted committee.

Indian Bank is a public sector bank. The Government of India held 88.06% stake in the bank as on 31 December 2020.

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