AU Small Finance Bank shares jump 3% as lender launches QIP issue

The issue has been set at a floor price of Rs 1,181.06 per share, on which the lender may offer a discount of not more than 5 per cent, according to its exchange filing.

Shares of AU Small Finance Bank were trading 3 per cent higher at Rs 1,268 on the BSE in intra-day trade on Wednesday after the private sector lender launched its qualified institutional placement (QIP) to raise growth capital.

The floor price of the issue has been set at Rs 1,181.06 per share, on which the lender may offer a discount of not more than 5 per cent, according to its exchange filing. The bank's capital-raising committee, it said, will meet on March 15 to determine the issue price and discount to be offered.

The bank said it intends to utilise the net proceeds for supporting the long-term growth aligned to the bank’s internal risk appetite, maintain sufficient headroom over and above the regulatory capital adequacy requirements and/or for general corporate requirements or any other purposes. The bank is looking to raise around Rs 600–700 crore, according to a Bloomberg report.

Meanwhile, in a separate regulatory filing, AU Small Finance Bank said it has received intimation from Uttam Tibrewal, whole-time Director of the bank of his intention to sell up to one million equity shares of AU Small Finance due to his personal commitments.

In the past six months, the stock of AU Small Finance Bank has outperformed the market by surging 95 per cent as against a 35 per cent rise in the S&P BSE Sensex. It hit a record high of Rs 1,316 on Tuesday, March 9.