PNB raises Rs 5,000 crore via QIP to fund expansion plan

Public sector lender Punjab National Bank (PNB) today said it has raised Rs 5,000 crore through qualified institutional placement (QIP) to fund expansion plan.

The bank had floated offer for raising Rs 3,000 crore with green shoe option of Rs 2,000 crore, which were fully subscribed, sources said.

The sale comprised about 14 per cent of the bank's outstanding equity.

Yesterday, the committee of directors for capital mop-up at a late evening meeting approved opening of the QIP, PNB had said in a regulatory filing on stock exchanges.

The bank had approved the floor price of Rs 176.35 per share of face value Rs 2, it said.

The board of the bank in September had given approval to mobilisation of Rs 5,000 crore through various instruments, including rights issue and private placement, during 2017-18.

Other state-owned lenders like Bank of Baroda, Bank of India, Union Bank of India Allahabad Bank and Andhra Bank have also lined up share sale.

Finance Minister Arun Jaitley in October had announced an unprecedented Rs 2.11 lakh crore two-year road map to strengthen PSBs, reeling under high non performing assets (NPAs) or bad loans.

Their NPAs have increased to Rs 7.33 lakh crore as of June 2017, from Rs 2.75 lakh crore in March 2015. The plan includes floating re-capitalisation bonds of Rs 1.35 lakh crore and raising Rs 58,000 crore from the market by diluting governments stake.

The government equity, as per the current policy, can come down to 52 per cent in state-owned banks. Jaitley had also announced that banks would get about Rs 18,000 crore under the Indradhanush plan over the next two years.