PNB corrects after launch of QIP issue

Punjab National Bank (PNB) fell 7.15% to Rs 37.65 after the PSU bank launched a qualified institutional placement (QIP) on Tuesday (15 December 2020) to raise funds from institutional investors.

The capital raising committee of the bank, at its meeting held on 15 December 2020, authorised the opening of the QIP issue and approved the floor price of Rs 37.35 per equity share, the bank said in a regulatory filing. The floor price is at a 7.89% discount to Tuesday's closing price of Rs 40.55 per share.

The capital raising committee of the bank will meet on Friday, 18 December 2020 to determine the QIP issue price.

At the annual general meeting held on 4 August 2020, the bank's shareholders approved a proposal to raise Rs 10,000 crore through a mix of both equity and debt.

"Our bank 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 our bank; and for general corporate requirements or any other purposes, PNB said in its draft placement document filed with the bourses.

PNB is a public sector bank. The Government of India held 85.59% stake in the bank as on 30 September 2020.

The bank's net profit surged 22.4% to Rs 620.81 crore in Q2 September 2020 from Rs 507 crore recorded in Q2 September 2019. Total income during the quarter grew by 50.7% YoY to Rs 23,438 crore.

In the past one month, the stock has zoomed 27.03% while the benchmark S&P BSE Sensex has added 6.72% during the same period.

However, on a year-to-date (YTD) basis, the stock is down by 41.57% while the Sensex gained 12.89% during the same period.

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