BoR to raise up to Rs 250 cr via QIP

Private lender Bank of Rajasthan (BoR) plans to raise up to Rs 250 crore by issuing equity shares at a premium to institutional investors to meet Basel-II adequacy norms and also reduce promoter’s holding.

The bank’s board on June 27 cleared a proposal to seek shareholders’ approval to raise up to Rs 250 crore in one or more tranches through the qualified institutional placement (QIP) route.

The CEO of BoR, P L Ahuja, said the bank was looking to raise capital to meet Basel-II adequacy norms and business development plans. The dilution of the promoter stake was linked to it, he added, without revealing the timing of the issue.

 

However, as per regulatory norms, no group or entity can hold more than 10 per cent stake in a bank. And the Tayal group, the promoters of BoR, held 33.87 per cent stake at the end of March 2009, according to the bank’s website. As for the bank’s capital adequacy, it stood at 11.50 per cent at the end of the same month.

Institutional investors, including FIIs and insurance companies, held 17.13 per cent stake in BoR. Some prominent institutional shareholders of the bank are Copthall Mauritius Holdings (4.28 per cent), Life Insurance Corporation of India (2.03 per cent) and ABN Amro Bank London Branch (1.99 per cent). The individual holding at the end of March 2009 was 11.85 per cent.

The bank’s total business comprising deposits and advances has crossed Rs 23,000 crore at the end of March 2009 as compared to Rs 21,378 crore a year ago.