Axis Bank to raise Rs 11,626 cr from Bain Capital, LIC

Axis Bank is planning to raise equity and equity-linked capital worth Rs 11,626 crore from a set of marquee investors, including entities affiliated with Bain Capital and its key promoter LIC.
Entities affiliated with Bain Capital propose to invest Rs 6,854 crore and LIC will invest Rs 1,583 crore, the bank said in a statement after a board approval today.
This will be one of the largest private equity investments in the domestic banking sector.
The bank proposes to raise Rs 9,063 crore through issuance of equity and the remaining Rs 2,563 crore through issue of warrants.
The bank has called for an EGM on December 8 to seek shareholders' approval.

The bank proposes to issue 172,630,639 equity shares on preferential basis at a price of Rs 525 per share (a premium of 2.4 per cent), and 45,357,385 warrants convertible into equity shares at a price of Rs 565 per share (a premium of 10.2 per cent), which will add Rs 43.6 crore to the paid-up capital of the bank.

This would entail a dilution of 8.23 per cent for existing shareholders, the bank added.
The capital raised will bolster the capital adequacy, thereby providing growth capital for the core business of the bank and its subsidiaries.
Bank chairman Sanjiv Misra said, credit growth trajectory is turning and is well positioned to participate in this development.

"This significant capitalisation and the interest shown by marquee investors, positions us for even greater strength," Misra said.
Head of the bank Shikha Sharma said, "we are honoured by the faith reposed by Bain Capital and LIC in the long term strategy of the bank."
Axis Bank was advised exclusively by Axis Capital and Bain Capital was advised exclusively by JP Morgan on this transaction. Legal advisors to Axis Bank are Shardul Amarchand Mangaldas and Bain Capital was advised by AZB & Partners.
Stephen Pagliuca, co-chairman of Bain Capital, said Axis Bank's leadership team is very well positioned to take advantage of what promises to be an exciting growth phase for private sector banks in the country.

"We are particularly excited about Axis' strong and differentiated retail franchise that we believe will be an important driver of future growth," he said.