Axis Bank rose 1.54% at Rs 552.90 at 10:37 IST on BSE after the bank said that it proposes to raise funds worth Rs 11626 crore through issue of equity shares and convertible warrants on a preferential basis.
The announcement was made after market hours on Friday, 10 November 2017.Meanwhile, the S&P BSE Sensex was down 87.61 points or 0.26% at 33,226.95.
On the BSE, 5.2 lakh shares were traded on the counter so far as against the average daily volumes of 6.58 lakh shares in the past one quarter. The stock had hit a high of Rs 564.50 in intraday trade, which is also a 52-week high for the stock. The stock had hit a low of Rs 549.20 so far during the day. The stock had hit a 52-week low of Rs 424.60 on 10 January 2017.
The stock had outperformed the market over the past one month till 10 November 2017, gaining 5.94% compared with 4.35% gains in the Sensex. The scrip had also outperformed the market in past one quarter, rising 11.83% as against Sensex's 5.66% rise. The scrip had, however, underperformed the market in past one year, gaining 7.49% as against Sensex's 21.07% rise.
The large-cap bank has equity capital of Rs 479.62 crore. Face value per share is Rs 2.
Axis Bank announced that it proposes to raise funds worth Rs 11626 crore through issue of equity shares and convertible warrants on a preferential basis to marquee investors including entities affiliated with Bain Capital Private Equity and the bank's promoter, Life Insurance Corporation of India. The bank received board's approval in this regard on 10 November 2017.
Entities affiliated with Bain Capital proposes to invest Rs 6854 crore and LIC proposes to invest Rs 1583 crore. The bank proposes to raise Rs 9063 crore through issuance of equity and the remaining Rs 2563 crore through issue of warrants. The issue price for offer of 17.26 crore equity shares is Rs 525 per share while the issue price for 4.53 crore convertible warrants is Rs 565 per warrant. This would entail dilution of 8.23% for existing shareholders.
The capital raised will bolster the capital adequacy of the bank, thereby providing growth capital for the core business of the bank and its subsidiaries.
LIC held 13.77% stake in the bank as per the shareholding pattern as on 30 September 2017.
This bank had said on 7 November 2017, that its board meets on 10 November 2017, to consider raising of funds by issue of equity/equity linked securities through permissible mode at an appropriate time.
The recent reports had suggested that private equity firm, Bain Capital was in advanced talks with the bank to invest between $750 million and $1 billion. The company had at that time clarified that it will make appropriate disclosures if any decision is taken with regards to capital raising exercise.
Axis Bank's net profit rose 35.5% to Rs 432.38 crore on 0.9% increase in total income to Rs 13820.62 crore in Q2 September 2017 over Q2 September 2016.
Axis Bank is one of the biggest private sector banks in India.
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