IDBI Bank gets Sebi nod to raise Rs 3,771 cr via QIP

State-owned IDBI Bank has received market regulator Sebi's approval to raise Rs 3,771 crore through issue of shares to qualified institutional players, a move which would dilute the government's holding significantly in the lender.
IDBI Bank in a statement said that Sebi has acceded to the request to permit the bank to raise capital by issue of equity shares aggregating up to Rs 3,771 crore by way of a QIP subject to provisions.
"The bank is exempted from the applicability of Regulation 82(c) of Sebi (ICDR) Regulation, 2009 as per Regulation 113 of Sebi (ICDR) Regulation, 2009," it said.
At the current market valuation, Rs 3,771 crore represents about 36.6 per cent equity stake of IDBI Bank. The government holding in the bank stands at 80.16 per cent.

Shares of the bank today closed at Rs 55.70 per unit, down 2.02 per cent on the BSE. Its current market capitalisation stood at Rs 10,583.30 crore.
As per the existing norms, government equity in a public sector bank cannot go below 52 per cent to maintain the public sector character of state-owned banks.

Finance Minister Arun Jaitley had earlier indicated a change in the characteristics of IDBI Bank where government would have a majority stake, but at the same time maintain an arm's length distance.
Citing the example of Axis Bank, he had wondered if IDBI Bank can follow that model.

The government indirectly controls 29.19 per cent in Axis Bank through the administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), the Life Insurance Corp and four other public sector general insurance companies.
On December 29, the IDBI Bank said the government has infused Rs 2,229 crore into the bank in lieu of preferential allotment of shares.
The government, in August, had announced capital infusion of Rs 20,088 crore in 13 public sector banks that include PNB, SBI, IDBI, Bank of Baroda and Canara Bank.